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CEE MARKETS-Budapest bucks European stocks rally on Richter plunge
December 4, 2017 / 2:40 PM / 10 days ago

CEE MARKETS-Budapest bucks European stocks rally on Richter plunge

    * Richter falls as EMA starts review of its Esmya drug
    * PKN Orlen rebound reverses Warsaw stock index decline
    * Zloty firms, Polish rate-setters may voice worry over CPI
    * Romanian 10-year bond sale draws solid demand after yield
rise

 (Adds Romanian government bond auction, rebound of Warsaw
stocks)
    By Sandor Peto and Radu-Sorin Marinas
    BUDAPEST/Bucharest, Dec 4 (Reuters) - Budapest stocks eased
on Monday, dragged down by a sell-off in drugmaker Richter
, now under investigation over an anti-tumour drug.
    Germany's dollar-exposed equities index and other
indices in the Western wing of the European Union rose after the
U.S. Senate passed a tax package that is expected to buoy
equities markets globally.
    In Central Europe, Warsaw's bluechip index reversed
an initial fall, driven by a rebound in the shares of oil group
PKN Orlen.
    The stock rose 2.6 percent by 1409 GMT, drifting off 4-month
lows reached amid worries that PKN's margins are deteriorating.
  
    Budapest's main index shed 0.6 percent, pushed down
by a 5 percent fall in Richter.
    Richter shares touched 8-and-1/2-month lows after the
European Medicines Agency (EMA) began a review of the company's
Esmya medicine used to treat non-cancerous tumours of the womb.
    "This follows four reports of serious liver injury, three of
which ended in liver transplantation, in patients treated with
the medicine," EMA said on its website.
    Richter's stock did not recover even though the company said
clinical data indicated that Esmya had no demonstrable link with
liver damage. 
    The forint and the zloty, firmed,
indicating that they were not hurt by outflows into the dollar,
which in recent months often weakened them in periods when the
greenback strengthened.
    The zloty gained 0.4 percent, trading on the firm side of
the 4.2 line against the euro. The forint firmed 0.2 percent.
    Regional currencies are buoyed by robust economic growth,
except for the leu which trades near record lows due
to worry that Romania's economy is overheating.
    Romania's government sold more 10-year bonds than planned at
an auction on Monday, indicating that a 60 basis points surge in
the yield since September had made the paper attractive.
    "Demand seems to be backed by a couple of investment funds
who wanted our paper in the final weeks of this year," a
Bucharest-based trader said.
    "Given that Poland is at some 3 percent (yield) and Hungary
at about 2 percent yields, Romania's 4.5 looks fair."
    Poland's annual inflation jumped to a 5-year high of 2.5
percent in November, but analysts expect the Polish central bank
to keep interest rates on hold at its meeting on Tuesday.

    But its statement will be closely watched as some rate
setters may become increasingly worried that inflation may rise
above 3.5 percent, the upper limit of the bank's target range.
    "If such a comment were to be presented, then the zloty has
a chance to strengthen further in relation to core currencies,"
Citi Handlowy analysts said in a note.
    
               CEE MARKETS  SNAPSH   AT  1510 CET         
                            OT                      
                            CURRENCIES                    
                            Latest  Previo  Daily   Change
                                    us              
                            bid     close   change  in
                                                    2017
 Czech crown                25.585  25.585   +0.00   5.56%
                                 0       5       %  
 Hungary                    313.35  313.94   +0.19  -1.45%
 forint                         00      00       %  
 Polish zloty               4.1987  4.2150   +0.39   4.89%
                                                 %  
 Romanian leu               4.6300  4.6308   +0.02  -2.05%
                                                 %  
 Croatian                   7.5545  7.5547   +0.00   0.01%
 kuna                                            %  
 Serbian                    119.23  119.17  -0.05%   3.46%
 dinar                          00      00          
 Note: daily   calculated   previo  close   1800          
 change        from         us      at      CET     
                            STOCKS                        
                            Latest  Previo  Daily   Change
                                    us              
                                    close   change  in
                                                    2017
 Prague                     1067.5  1063.9   +0.33   +15.8
                                 3       8       %      3%
 Budapest                   37971.  38188.  -0.57%   +18.6
                                21      81              5%
 Warsaw                     2410.1  2389.9   +0.85   +23.7
                                 6       2       %      3%
 Bucharest                  7801.9  7796.2   +0.07   +10.1
                                 3       1       %      2%
 Ljubljana                  790.02  784.90   +0.65   +10.0
                                                 %      9%
 Zagreb                     1869.5  1861.5   +0.43  -6.28%
                                 0       7       %  
 Belgrade                   744.43  744.59  -0.02%   +3.77
                                                         %
 Sofia                      670.27  667.02   +0.49   +14.3
                                                 %      0%
                            BONDS                         
                            Yield   Yield   Spread  Daily
                            (bid)   change  vs      change
                                            Bund    in
 Czech                                              spread
 Republic                                           
   2-year                    0.044   0.039   +075b   +3bps
                                                ps  
   5-year                    0.766   0.027   +110b   +0bps
                                                ps  
   10-year                   1.493  -0.052   +116b   -9bps
                                                ps  
 Poland                                                   
   2-year                    1.682   0.031   +239b   +3bps
                                                ps  
   5-year                    2.707   0.015   +304b   -1bps
                                                ps  
   10-year                   3.322  -0.013   +299b   -5bps
                                                ps  
               FORWARD      RATE    AGREEMENT             
                            3x6     6x9     9x12    3M
                                                    interb
                                                    ank
 Czech Rep             <PR    0.99    1.18     1.3       0
               IBOR=>                               
 Hungary               <BU    0.07    0.11    0.14    0.03
               BOR=>                                
 Poland                <WI   1.775    1.85   1.925    1.73
               BOR=>                                
 Note: FRA     are for ask                                
 quotes        prices                               
 

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