CEE MARKETS-Romanian stocks rise on hope for changes in bank tax - Southern Business Review

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Tuesday, February 5, 2019

CEE MARKETS-Romanian stocks rise on hope for changes in bank tax


 * Romanian meeting fuels hopes for changes in bank tax * Bank stocks push Bucharest index to 4-week-high * Cbanks seen on hold in Bucharest, Prague, Warsaw, Belgrade * Romanian bond yield rises again after retreat By Sandor Peto BUDAPEST, Feb 5 (Reuters) - Romanian bank shares pushed
Bucharest stocks to a four-week-high on Tuesday on hopes
that a new tax may hurt lenders less than initially feared. The shares of Banca Transilvania and BRD Group
Societe Generale built on the previous session's
gains to set multi-week highs. A meeting of finance ministry and
central bank officials on Monday generated some hopes of changes to the new tax that would be less painful to banks. Bucharest's blue-chip index is still about 13 percent lower
than its level before the government announced in mid-December
new taxes on the banking and the energy sectors, effective from
2019, causing a plunge in share prices. The country has yet to finalise its 2019 budget and it is
still unclear how exactly the tax on bank assets, which the
government has said would be linked to interbank rates, will be
applied. The central bank is due to hold a meeting on Thursday, where
it is expected to keep its 2.5 percent main rate on hold, but
uncertainty over the tax is likely to continue as consultations
with the government are due to resume only on Feb. 18. The Czech and the Serbian central banks are also due to meet
on Thursday, and the Polish central bank will decide on interest
rates on Wednesday. All four banks are expected to keep rates on hold. Their currencies -- the leu, the crown,
the dinar and the zloty -- were a shade
stronger versus the euro on Tuesday at 1001 GMT. The forint eased 0.2 percent to 317.68. It has given up some ground in the past week as investors
were scaling back expectations that Hungary's central bank could
start to tighten policy soon, but it is near nine-month highs of
315.00 and well off a 2019 low of 324.25 set on Jan. 16. Hungarian and Czech retail sales growth data for December
showed some slowdown, but a robust rise in wages is still
expected to fuel rising consumption across the region. Stocks and government bonds in the region's main markets
changed little, except for Bucharest. The yield on Romania's 5-year government bonds rose 8 basis
points to 4.43 percent, after plunging almost 40 basis points
since Jan. 28 as the government said it could afford not to sell
bonds for months if yields remain too high. The tax plan has fuelled jitters in Romania's government
bond market because it refers to banks' financial assets,
including bonds held by them. CEE SNAPSHOT AT MARKETS 1101 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.6850 25.6950 +0.04% +0.09% crown > Hungary <EURHUF= 317.6800 317.2500 -0.14% +1.07% forint > Polish <EURPLN= 4.2866 4.2880 +0.03% +0.07% zloty > Romanian <EURRON= 4.7447 4.7505 +0.12% -1.91% leu > Croatian <EURHRK= 7.4140 7.4155 +0.02% -0.05% kuna > Serbian <EURRSD= 118.3500 118.3900 +0.03% -0.04% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1056.37 1052.050 +0.41% +7.08% 0 Budapest 40842.16 40856.97 -0.04% +4.35% Warsaw 2389.87 2390.46 -0.02% +4.97% Bucharest 7377.51 7294.19 +1.14% -0.08% Ljubljana <.SBITOP 828.00 831.57 -0.43% +2.95% > Zagreb 1760.29 1761.03 -0.04% +0.66% Belgrade <.BELEX1 700.17 700.38 -0.03% -8.08% 5> Sofia 578.80 578.40 +0.07% -2.63% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.7850 0.0400 +236bps +4bps R> 5-year <CZ5YT=R 1.6040 0.0330 +193bps +2bps R> 10-year <CZ10YT= 1.7160 0.0090 +152bps -1bps RR> Poland 2-year <PL2YT=R 1.5450 -0.0820 +212bps -8bps R> 5-year <PL5YT=R 2.2290 0.0110 +255bps +0bps R> 10-year <PL10YT= 2.7750 0.0000 +258bps -1bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.08 2.11 2.13 1.99 <PRIBOR= > Hungary 0.33 0.51 0.69 0.15 Poland 1.73 1.73 1.73 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Additional reporting by Luiza Ilie; editing by Emelia
Sithole-Matarise)