April 25, 2019 / 9:26 AM / 3 months ago

CEE MARKETS-Oil stocks reverse gains, Poland halts Russian oil imports

    * Oil shares drive Warsaw, Budapest stock indexes lower
    * Poland suspends Russian crude imports over quality
    * Technicals rather than crude quality causes share
fall-analyst
    * Strong government bond auction is expected in Warsaw

    By Sandor Peto
    BUDAPEST, April 25 (Reuters) - Shares of oil groups PKN
Orlen and MOL dragged stock indexes in Warsaw
and Budapest lower on Thursday after Poland and Germany
suspended imports of Russian crude via a major pipeline, citing
poor quality.
    Warsaw's bluechip index dropped almost 1 percent,
led by a 2.3 percent fall in PKN, even though the company
reported higher than expected net profits for the first quarter
of the year.
    PKN said it did not expect the halt in oil deliveries to
last longer than a week or two, adding that there was no
disruption at its Czech refinery.
    The Czech refinery receives Russian oil via a different
pipeline, which is also used by Hungary's MOL.
    Tamas Pletser, an analyst at Erste in Budapest, said a
recent rally in oil company shares had exacerbated Thursday's
move lower. 
    "The companies can manage the quality deterioration which is
unlikely to last for more than a few days. MOL and other stocks
have seen a quite robust rise in the past days and the fall
comes after that," Pletser added.
    MOL stocks fell almost 1 percent to 3,418 forints,
retreating from a 12-year high reached on Wednesday.
    If the stock holds above 3,380 forints, technicals suggest a
rise of up to 800 forints over the next year, Erste said in a
note.
    A rise in crude prices this year has supported oil
shares, but it has also increased worries about inflation, which
has been rising in Central Europe.
    That, in turn, has weighed on the forint, which
tested 3-and-1/2-month lows against the euro, trimming 0.2
percent, dealers said.
    The National Bank of Hungary, which dropped guidance for
gradual monetary tightening a month ago, is unlikely to tighten
policy at its meeting on Tuesday, one Budapest-based dealer
said.
    The government's bi-weekly bond auction on Thursday is not
expected to generate robust demand and yields could rise
slightly relative to secondary market levels, one trader said
early in the session.
    An auction in Poland could however bring strong results with
the government offering bonds worth 4-6 billion zlotys while
bonds worth 8 billion zlotys expire on Thursday, Santander Bank
analysts said in a note.
    Czech central bank Vice-Governor Marek Mora said that he was
ready to back a 25-basis-point increase in interest rates at
next week's meeting if new economic forecasts support further
tightening.
    But the crown was flat as investors remain split
over the odds of a hike.    
    
            CEE       SNAPSHOT   AT                         
            MARKETS             1025 CET            
                      CURRENCI                              
                      ES                            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2019
 Czech      <EURCZK=   25.7520   25.7480    -0.02%    -0.17%
 crown      >                                       
 Hungary    <EURHUF=  322.5000  321.8000    -0.22%    -0.44%
 forint     >                                       
 Polish     <EURPLN=    4.2968    4.2963    -0.01%    -0.17%
 zloty      >                                       
 Romanian   <EURRON=    4.7595    4.7580    -0.03%    -2.22%
 leu        >                                       
 Croatian   <EURHRK=    7.4170    7.4215    +0.06%    -0.09%
 kuna       >                                       
 Serbian    <EURRSD=  117.9000  118.0000    +0.08%    +0.34%
 dinar      >                                       
 Note:      calculated from               1800 CET          
 daily                                              
 change                                             
                                                            
                      Latest    Previous  Daily     Change
                                close     change    in 2019
 Prague                1086.42  1088.970    -0.23%   +10.12%
                                       0            
 Budapest             43189.58  43563.38    -0.86%   +10.35%
 Warsaw                2350.09   2372.33    -0.94%    +3.23%
 Bucharest             8397.45   8370.14    +0.33%   +13.73%
 Ljubljana  <.SBITOP    882.77    882.69    +0.01%    +9.76%
            >                                       
 Zagreb                1812.67   1811.88    +0.04%    +3.65%
 Belgrade   <.BELEX1    751.09    749.59    +0.20%    -1.39%
            5>                                      
 Sofia                  569.57    569.65    -0.01%    -4.19%
                      BONDS                                 
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
                                                    in
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=R    1.5870   -0.2430   +219bps    -24bps
            R>                                      
   5-year   <CZ5YT=R    1.7190    0.0100   +215bps     +1bps
            R>                                      
   10-year  <CZ10YT=    1.8460   -0.0060   +186bps     +0bps
            RR>                                     
 Poland                                                     
   2-year   <PL2YT=R    1.6090   -0.1080   +222bps    -11bps
            R>                                      
   5-year   <PL5YT=R    2.2370    0.0110   +267bps     +2bps
            R>                                      
   10-year  <PL10YT=    2.9050    0.0090   +292bps     +1bps
            RR>                                     
            FORWARD   RATE      AGREEMEN                    
                                T                   
                      3x6       6x9       9x12      3M
                                                    interban
                                                    k
 Czech Rep                2.19      2.21      2.20      2.02
            <PRIBOR=                                
            >                                       
 Hungary                  0.29      0.43      0.59      0.16
                                                    
 Poland                   1.74      1.75      1.76      1.72
                                                    
 Note: FRA  are for ask prices                              
 quotes                                             
 
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