Markets In Hungary Turn Sour On Orban Comments
- 1 Aug 2012 9:00 AM
Capital markets reacted negatively to the Prime Minister’s last Wednesday comments in which he seemed adamant about extending the financial transaction tax to the MNB, according to Bertalan Nagy, head of the private banking unit of Equilor brokers. The euphoria fuelled by hopes of a quick agreement dissipated this week and gains in Hungarian asset prices began to be priced out, he said.
Long-term yields dropped 80 basis points during this optimistic period, Nagy said, but have since returned to earlier levels.
Markets are waiting for the first comments from the IMF-EU delegation, he continued, but the IMF did not hold a press conference before leaving Hungary. This is a signal that there is something the Fund does not like, Nagy added.
He pointed to the financial transaction tax as a probable source of disagreement.
The IMF is expected to comment in September, in the next round of talks.
Nagy expects pressure on Hungarian assets to mount until an agreement is reached, which he expects in late 2012 or 2013.
Source: Hungary Around the Clock
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