KBC Market Research Desk
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S&P affirms Hungary’s rating
Scottish “No” helped regional bond market
The forint, supported by expectations that Standard & Poor’s might upgrade Hungary’s rating, reached its eight-week high at 310.30 EUR/HUF last Friday. Nevertheless the agency finally decided to affirm the rating for the country´s longterm foreign currency debt at BB with stable outlook, maintaining it slightly below ratings granted by its peers. According to the accompanying S&P statement, Hungary´s economy has improved and a decent 3% growth has been projected for 2015. The S&P acknowledged that Hungary had rebounded from depressed consumption and investment, at the same time, though, the agency stressed, that the country still maintained a large public sector, political uncertainty and weaknesses in its banking sector, which posed risks for future growth.
On the bond market, yields of Hungarian and Polish long term government bonds dropped by around 5 basis points during a sigh of relief the euro area bond market heaved after victory of “No” in the Scottish referendum.
Regarding this week’s calendar of expected events, it is worth mentioning that two central banks in the region will hold their rate-setting meeting soon – the Hungarian central bank (on Tuesday) and the Czech national bank (on Thursday). According to our view, none of them will change the base rate or other important parameter of its monetary policy.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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