Edition:
United States

Radu-Sorin Marinas

CEE MARKETS-Romania's leu buoyed by expectations of benign S&P report

Mar 15 2019

* S&P to publish good report for Romania- minister * Government pledges to soften its tax plans * President signs budget bill into law By Radu-Sorin Marinas BUCHAREST, March 15 Romania's leu extended its gains against the euro on Friday after rebounding from six-week lows in the previous session, supported by expectations of a benign report from Standard & Poor's on the country's credit rating outlook. The rating agency is expected to announce its decision late on Friday or on Saturday. "We're going to hear a very good (S&P) decision," Finance Minister Eugen Teodorovici told a private television channel. Romanian asset prices have been jittery since the leftist government announced three months ago a raft of new taxes on energy companies and banks to finance higher state spending. The tax on bank assets has complicated monetary policy because it is linked to interbank rates. The government promised to amend the tax after S&P gave Romania two weeks from March 2 to appeal its credit rating outlook. The rating agency did not publish that rating outlook but it was widely understood in financial markets to be negative, revised down from stable. "The 4.7500-4.7700 (leu) range should hold for today, awaiting the S&P review tonight. This comes after a two week delay due to the Romanian government's appeal against its revision of the outlook to negative from stable," ING Bank analysts in Bucharest said in a note. By 1100 GMT, the leu had firmed 0.2 percent against the euro to trade at 4.7560. Earlier on Friday President Klaus Iohannis, a critic of the ruling Social Democrats' budget which he and many economic analysts had branded as unrealistic, signed the bill into law after he had exhausted all legal ways to halt it. The Polish zloty and the Czech crown both traded virtually flat to the euro on Friday, at 4.3050 and 25.671 respectively. Hungarian markets were closed for a national Holiday. CEE SNAPSHOT AT 1110 MARKETS CET CURRENCIES Latest Previous Dail Change y bid close chan in 2019 ge Czech 25.6660 25.6610 -0.0 +0.16% crown 2% Hungary 314.3500 314.3100 -0.0 +2.14% forint 1% Polish 4.3039 4.3025 -0.0 -0.33% zloty 3% Romanian 4.7574 4.7650 +0. -2.17% leu 16% Croatian 7.4180 7.4215 +0. -0.11% kuna 05% Serbian 118.0800 118.1100 +0. +0.19% dinar 03% Note: calculated from 1800 daily CET change Latest Previous Dail Change y close chan in 2019 ge Prague 1073.75 1068.4300 +0. +8.84% 50% Budapest 41335.02 41335.02 +0. +5.61% 00% Warsaw 2325.69 2319.28 +0. +2.15% 28% Bucharest 7889.24 7858.18 +0. +6.85% 40% Ljubljana 874.01 869.00 +0. +8.67% 58% Zagreb 1766.93 1770.01 -0.1 +1.04% 7% Belgrade <.BELEX15 707.47 707.10 +0. -7.12% > 05% Sofia 580.79 579.50 +0. -2.30% 22% BONDS Yield Yield Spre Daily ad (bid) change vs change in Bund Czech spread Republic 2-year <CZ2YT=RR 1.8110 0.0190 +23 +2bps > 6bps 5-year <CZ5YT=RR 1.7730 -0.0130 +21 -1bps > 5bps 10-year <CZ10YT=R 1.9190 0.0150 +18 +2bps R> 4bps Poland 2-year <PL2YT=RR 1.6260 -0.1090 +21 -10bps > 7bps 5-year <PL5YT=RR 2.2410 0.0010 +26 +1bps > 2bps 10-year <PL10YT=R 2.8990 0.0100 +28 +2bps R> 2bps FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M interbank Czech Rep < 2.19 2.23 2.24 2.03 PRIBOR=> Hungary < 0.41 0.60 0.80 0.14 BUBOR=> Poland < 1.74 1.73 1.74 1.72 WIBOR=> Note: FRA are for ask prices quotes ************************************************* ************* ($1 = 278.1600 forints) (Editing by Gareth Jones)

Romania's critical networks do not use Huawei equipment: STS

Mar 07 2019

BUCHAREST Huawei equipment is not used in any of Romania's state critical infrastructure under the administration of the NATO member's Special Telecommunications Service (STS), the STS told Reuters on Thursday.

Exclusive: Romania's opposition seeks Huawei ban in telecom infrastructure

Mar 05 2019

BUCHAREST Romania's biggest opposition party will trigger a public inquiry into Huawei's contribution to critical infrastructure and seek to bar it from 5G network development due to mounting security concerns, its IT expert said on Tuesday.

UPDATE 1-S&P gives Romania two weeks to appeal rating outlook

Mar 02 2019

BUCHAREST, March 2 Standard & Poor's Global Ratings has given Romania two weeks to appeal its credit rating outlook, time Bucharest said on Saturday was needed to approve its budget and assess tax moves.

CEE MARKETS-Romanian stocks reverse early rise on worry over budget

Feb 22 2019

* Bucharest stocks retreat from 2-month low on budget worry * Romanian president says he will challenge budget in court * Magyar Telekom, MOL cash-flow outlook disappoint (Recasts with retreat of Romanian shares) By Sandor Peto and Radu-Sorin Marinas BUDAPEST/BUCHAREST, Feb 22 Romanian shares reversed an early rise to two-month highs on Friday after the country's President Klaus Iohannis said he would challenge the government's 2019 budget plan in the Constitutional Court. Bucharest shares fell more than 20 percent in a few weeks after new taxes on banks and energy firms in the 2019 budget were announced in December. Since hitting its lowest level in more than two years in January, the main index gradually regained some ground, but the worries flared up on Friday after Iohannis said he would challenge the "unrealistic" budget. The index fell 1.2 percent by 1231 GMT, while Warsaw and Prague tracked a rise in shares in Asia and in Western Europe on optimism over U.S.-China trade talks. Banks led the decline in Bucharest. Banca Transilvania shed 1.9 percent, retreating from a 6-week high, and BRD Groupe Societe Generale fell 2.6 percent, off a 2-month high. "There is some nervousness among investors about the fate of this year's budget and its final shape, nobody really knows what will change in it or if something will change in it," one Bucharest-based stock broker said. "This is uncertainty and bank stocks are normally hit harder." Budapest's main index also bucked the rise in Europe, dropping by 0.2 percent. Magyar Telekom shares shed 1.2 percent, extending a decline since reporting fourth-quarter earnings on Wednesday. Oil group MOL struggled to break through resistance levels at 3,300 forints ($11.78) despite a surprise rise in its fourth-quarter earnings. Equilor brokerage analyst Zsolt Bosnyak said an expected decline in both MOL and Magyar Telekom's free cash flow may be behind the relatively weak performance of the shares. "There may be some disappointment over MOL's EBITDA guidance, while downstream investments will cut their free cash flow," he said. Magyar Telekom forecasts 5 percent annual growth in its free cash flow, but investment in 5G technology may cut into its cash and it will face growing competition, Bosnyak said. OTP Bank struggled to push through three-week highs. It may get a boost when it reports earnings next week, Equilor analyst Lajos Torok said. The Czech crown and the forint eased about 0.1 percent versus the euro, while the zloty and the leu were a shade firmer. The dinar rose to 118.11 against the euro, after Serbia's annual inflation rose to 2.1 percent in January from 2 percent in December. The kuna slipped to 7.425. Croatia's inflation fell to an annual 0.2 percent from 0.8 percent in January. CEE SNAPSHOT AT MARKETS 1431 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.6620 25.6350 -0.11% +0.18% crown > Hungary <EURHUF= 317.8600 317.7100 -0.05% +1.01% forint > Polish <EURPLN= 4.3350 4.3390 +0.09% -1.05% zloty > Romanian <EURRON= 4.7602 4.7616 +0.03% -2.23% leu > Croatian <EURHRK= 7.4250 7.4155 -0.13% -0.20% kuna > Serbian <EURRSD= 118.1100 118.1600 +0.04% +0.16% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1062.03 1058.890 +0.30% +7.65% 0 Budapest 40629.40 40721.48 -0.23% +3.81% Warsaw 2356.24 2339.85 +0.70% +3.50% Bucharest 7764.11 7856.01 -1.17% +5.15% Ljubljana <.SBITOP 849.61 849.21 +0.05% +5.64% > Zagreb 1771.89 1772.63 -0.04% +1.32% Belgrade <.BELEX1 684.61 680.63 +0.58% -10.12% 5> Sofia 579.95 577.94 +0.35% -2.44% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.8360 0.0420 +240bps +5bps R> 5-year <CZ5YT=R 1.8180 0.0240 +220bps +5bps R> 10-year <CZ10YT= 1.8850 0.0060 +179bps +4bps RR> Poland 2-year <PL2YT=R 1.5770 0.0150 +214bps +2bps R> 5-year <PL5YT=R 2.1490 -0.0050 +253bps +2bps R> 10-year <PL10YT= 2.7560 -0.0050 +266bps +2bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.24 2.28 2.29 2.02 <PRIBOR= > Hungary 0.34 0.54 0.74 0.15 Poland 1.73 1.71 1.71 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Additional reporting by Alicja Ptak in Warsaw Editing by Larry King and Peter Graff)

CEE MARKETS-Tax worry hits Bucharest stocks, Hungarian bond yields fall

Jan 14 2019

* Bucharest stocks fall on worry over new bank tax * Romanian inflation retreats further as expected * Central banks supports leu via deposit tool * Hungarian bond yields resume fall ahead of CPI data (Adds BRD stock fall, Romanian bond and central bank deposit tenders, new comments, Hungarian bond yields fall) By Sandor Peto and Radu-Sorin Marinas BUDAPEST/BUCHAREST, Jan 14 Romanian stocks hit a 2-year low as concerns over 2019 tax increases on the bank and energy sectors have returned. Sentiment in Central Europe turned sour anyway as a surprise fall in China's exports turned the spotlight again on global economic slowdown worries. Bucharest's blue-chip index fell more than 4 percent, below 2-year lows reached last month after the government announced plans for changes in tax and pensions rules. The measures included a tax on bank assets, linked in an unconventional way to interbank rates which are also in the focus of monetary policy. Banca Transilvania fell 9.5 percent and BRD Groupe Societe Generale shed 7.5 percent. "There's a lot of uncertainty in the market on the new banking tax," one Bucharest-based foreign stocks trader said. Investors still do not know details of the base of the tax and whether it would also apply to mandatory reserves, the trader added. Late on Friday, the European Commission also warned Romania, which holds the EU's rotating presidency, over the government's plans to decriminalise some forms of corruption. The leu shrugged off a continuing fall in Romania's annual inflation to 3.3 percent in December from 3.4 percent in November. The drop from levels above 5 percent last year to within the central bank's 1.5-3.5 percent target range increases the chance that the bank will not increase its interest rates further, analysts said. The government sold less 2023-expiry bonds than planned at an auction, with the average yield rising to 4.41 percent from 4.34 percent. But the leu firmed a shade to 4.68 against the euro as the central bank reduced market liquidity through its one-week deposit tool. "The disinflation process in Romania that enabled ROMGBs (Romanian government bonds) to take part in a broader EM rally in recent weeks is set to bottom out," Raiffeisen analysts said in a note. Hungarian bond yields, however, resumed their fall which stalled in the first week of the year. Yields were fixed lower by about 10 basis points along the curve, with the 10-year yield set at 2.78 percent. The market is optimistic that December inflation data due on Tuesday will show a further drop from 3.1 percent in the annual rate in November, one Budapest-based trader said. "The Fed may not increase rates further, the ECB may tighten later and there are global recession fears: global trends support Hungarian bonds," the trader added. CEE SNAPSHOT AT MARKETS 1539 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.5690 25.5660 -0.01% +0.54% crown > Hungary <EURHUF= 321.4400 321.4000 -0.01% -0.11% forint > Polish <EURPLN= 4.2900 4.2938 +0.09% -0.01% zloty > Romanian <EURRON= 4.6800 4.6830 +0.06% -0.56% leu > Croatian <EURHRK= 7.4350 7.4312 -0.05% -0.34% kuna > Serbian <EURRSD= 118.3200 118.4300 +0.09% -0.02% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 998.14 1011.440 -1.31% +1.17% 0 Budapest 40549.30 40886.06 -0.82% +3.60% Warsaw 2320.21 2335.10 -0.64% +1.91% Bucharest 6926.41 7240.73 -4.34% -6.19% Ljubljana <.SBITOP 811.66 803.83 +0.97% +0.92% > Zagreb 1735.70 1734.51 +0.07% -0.75% Sofia 567.87 567.46 +0.07% -4.47% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.7910 0.0920 +239bps +10bps R> 5-year <CZ5YT=R 1.7150 -0.0200 +206bps +0bps R> 10-year <CZ10YT= 1.8580 0.0040 +164bps +2bps RR> Poland 2-year <PL2YT=R 1.3480 -0.0190 +195bps -1bps R> 5-year <PL5YT=R 2.1640 -0.0310 +251bps -1bps R> 10-year <PL10YT= 2.7480 -0.0080 +253bps +1bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.14 2.18 2.20 2.01 <PRIBOR= > Hungary 0.24 0.46 0.70 0.13 Poland 1.74 1.73 1.73 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Reporting by Sandor Peto, editing by Ed Osmond)

CEE MARKETS-Bucharest stocks approach 2-year lows on tax worry

Jan 14 2019

* Bucharest stocks fall 2.2 pct before partial recovery * New taxes weigh on the outlook of Romanian stocks * Romanian inflation retreats further as expected By Sandor Peto and Radu-Sorin Marinas BUDAPEST/BUCHAREST, Jan 14 Romanian stocks fell as much as 2.2 percent on Monday, approaching 2-year lows as concerns over 2019 tax increases on the bank and energy sectors have returned. Sentiment in Central Europe turned sour anyway as a surprise fall in China's exports turned the highlight on global economic slowdown concerns again, hitting Asian and European stocks. Bucharest's blue-chip index got within a one-percent distance from its pre-Christmas 2-year lows reached after the government announced plans for changes in tax and pensions rules. The measures included a tax on bank assets, in an unconventional way linked to interbank rates which are also in the focus of monetary policy. Some details of its application remain unclear. The measures are unlikely to keep the budget deficit below the European Union's threshold, 3 percent of economic output, and creating uncertainty in the business environment may make a slowdown in economic growth bigger, analysts said. "Should foreign banks curb lending, as happened in Hungary for instance (in the early 2010s), the adverse impact on the cycle might well offset some of these (government) revenue gains," Morgan Stanley analysts said in a note. Late on Friday, the European Commission also warned Romania, which holds the EU's rotating presidency, over the government's plans to decriminalise some forms of corruption. Bucharest's stock index halved its initial loss to 1.1 percent by 0936 GMT. Budapest's blue-chip index fell at the same rate, retreating from a one-year high reached last week. The drop in Romania was led by an over 2 percent decline in the shares of Banca Transilvania, one of the country's biggest lenders. The leu shrugged off a continuing fall in Romania's annual inflation to 3.3 percent in December from 3.4 percent in November. The drop from levels above 5 percent last year to within the central bank's 1.5-3.5 percent target range increases the chance that the bank will not increase its interest rates further, analysts said. "There are risks on the rise that Romanian rate setters would not resume rate hikes (on the one hand due to banking tax, on the other hand due to ECB postponement risks)," Raiffeisen analyst Stephan Imre said in a note. With the Romanian disinflation process bottoming out, the country's bonds could start to reverse the past weeks' sharp decline in regional bond yields, he said. An auction of 2023-expiry Romanian bonds could still create demand around secondary market bids of 4.37 percent as the bond's tenor is in demand from a broad range of investors, ING analysts said in a note. CEE SNAPSHOT AT MARKETS 1036 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.5600 25.5660 +0.02% +0.58% crown > Hungary <EURHUF= 321.2000 321.4000 +0.06% -0.04% forint > Polish <EURPLN= 4.2948 4.2938 -0.02% -0.12% zloty > Romanian <EURRON= 4.6785 4.6830 +0.10% -0.52% leu > Croatian <EURHRK= 7.4350 7.4312 -0.05% -0.34% kuna > Serbian <EURRSD= 118.3000 118.4300 +0.11% +0.00% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1007.42 1011.440 -0.40% +2.11% 0 Budapest 40441.43 40886.06 -1.09% +3.33% Warsaw 2329.24 2335.10 -0.25% +2.31% Bucharest 7162.05 7240.73 -1.09% -3.00% Ljubljana <.SBITOP 808.50 803.83 +0.58% +0.53% > Zagreb 1736.86 1734.51 +0.14% -0.68% Belgrade <.BELEX1 696.20 702.40 -0.88% -8.60% 5> Sofia 568.54 567.46 +0.19% -4.36% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.7070 0.0090 +230bps +1bps R> 5-year <CZ5YT=R 1.7310 -0.0040 +207bps +1bps R> 10-year <CZ10YT= 1.8370 -0.0170 +162bps +0bps RR> Poland 2-year <PL2YT=R 1.3420 -0.0250 +193bps -2bps R> 5-year <PL5YT=R 2.1700 -0.0250 +250bps -1bps R> 10-year <PL10YT= 2.7460 -0.0100 +253bps +1bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.14 2.18 2.20 2.01 <PRIBOR= > Hungary 0.25 0.46 0.68 0.13 Poland 1.73 1.73 1.73 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Reporting by Sandor Peto, editing by Ed Osmond)

Romania says political infighting won't hamper its EU presidency

Jan 10 2019

BRUSSELS/BUCHAREST Political divisions will not undermine Romania's six-month EU presidency, top officials from Bucharest said on Thursday, as the European Commission expressed concerns over whether the country was ready to lead the bloc until mid-2019.

CORRECTED-CEE MARKETS-Stocks rise, forint and crown trade near multi-month highs

Jan 07 2019

(Corrects lead to read "risk appetite" not "risk aversion") * Warsaw leads rise in stocks, U.S. jobs data boosts risk appetite * Zloty hovers to 90-day moving average, crown and forint off high * Romanian central banker warns over policy independence * Polish 10-year yield drops again after Friday's rebound By Sandor Peto and Radu-Sorin Marinas BUDAPEST/BUCHAREST, Jan 7 Central European stocks mostly firmed on Monday as strong U.S. jobs data released on Friday increased risk appetite in global markets while the region's currency markets remained cautious. Although Warsaw led the region's mild equity gains, with its blue-chip index rising by 0.8 percent by 0947 GMT, the zloty led losses, shedding a quarter of a percent. Trading at 4.2985 versus the euro, it was still not weaker than its 90-day moving average. The Czech crown touched a 3-1/2-month high before retreating to 25.566 versus the euro, flat from Friday, while the forint retreated from the brink of 5-month highs beyond 320.8, and traded at 321.17. Data released by Hungary on Monday showed a slight slowdown in the annual growth of retail sales to 5.2 percent in November. But wages continue to surge as the region's labour markets are tight, probably boosting imports and nudging short-term interbank interest rates higher this year, analysts said. Czech interest rates should continue to rise until there is a clear view of a recession risk or signs that inflation is tamed, hawkish central bank (CNB) board member Ales Michl said in daily Mlada Fronta Dnes on Monday. Even before the CNB's February meeting, Romania and Poland's central banks will decide on interest rates this week and both are expected to keep them on hold. Romanian central bank board member Daniel Daianu said on the bank's blog on Sunday that the tax on commercial banks' assets, launched by the government last month to help rein in a rise in the budget deficit, constrains monetary policy. Further comments from Governor Mugur Isarescu, whose term will expire this year, will be closely watched on Tuesday. The leu traded a touch weaker, at 4.6633 against the euro, but Bucharest's stock index rose slightly, extending this year's gains to 4 percent. At 7,678 points, the index was still about 1,000 points below early December levels before a plunge after the government announced its tax plans for 2019, which hit several business sectors, including banks. In the region's government bond markets, Poland's 10-year yield dropped 4 basis points to 2.76 percent, after a 7 basis point rise on Friday, tracking a rebound in U.S. yields. Hungary's corresponding yield stayed near Friday's increased levels, at 2.89 percent. "This is a natural correction after a big decline (in December) in the local market," one Budapest-based dealer said. CEE SNAPSHOT AT MARKETS 1047 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.5660 25.5700 +0.02% +0.55% crown > Hungary <EURHUF= 321.1700 321.0000 -0.05% -0.03% forint > Polish <EURPLN= 4.2985 4.2890 -0.22% -0.21% zloty > Romanian <EURRON= 4.6633 4.6611 -0.05% -0.20% leu > Croatian <EURHRK= 7.4310 7.4359 +0.07% -0.28% kuna > Serbian <EURRSD= 118.2500 118.3500 +0.08% +0.04% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1006.50 1004.210 +0.23% +2.02% 0 Budapest 40117.39 40145.18 -0.07% +2.50% Warsaw 2303.03 2284.95 +0.79% +1.16% Bucharest 7678.10 7665.19 +0.17% +3.99% Ljubljana <.SBITOP 802.25 801.50 +0.09% -0.25% > Zagreb 1732.31 1729.79 +0.15% -0.94% Belgrade <.BELEX1 731.79 731.79 +0.00% -3.93% 5> Sofia 578.92 579.83 -0.16% -2.61% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.6110 -0.0690 +221bps -7bps R> 5-year <CZ5YT=R 1.7510 0.0370 +208bps +5bps R> 10-year <CZ10YT= 1.7670 0.0040 +158bps +2bps RR> Poland 2-year <PL2YT=R 1.4700 -0.0050 +207bps -1bps R> 5-year <PL5YT=R 2.2420 -0.0400 +257bps -3bps R> 10-year <PL10YT= 2.7820 -0.0070 +259bps +1bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.08 2.18 2.18 2.01 <PRIBOR= > Hungary 0.32 0.54 0.81 0.13 Poland 1.75 1.77 1.77 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Reporting by Sandor Peto, editing by Ed Osmond)

IMF says Romania risks missing its fiscal deficit goal

Nov 12 2018

BUCHAREST, Nov 12 Romania risks missing its budget deficit goal this year, the International Monetary Fund warned on Monday, recommending the country reassess wage and pension hike plans.

World News