"Following a 10% decline in the BUX index, fund managers have become much more upbeat about the short-term outlook on the bourse. Longer-term expectations should not disappoint those who want to see a rise in the index, but the ratio of fund managers forecasting extreme changes in the index has grown since the previous poll.The change in weightings compared to the respondents' own benchmark is also hinting at a turnaround on the Budapest Stock Exchange (BSE).
The contributing fund managers to the poll were: AXA, Berenberg, Buda-Cash, Budapest Fund Management, CIB, Citadella Consulting, Concorde, Credit Suisse, Dialóg, Equilor, Generali, K&H, OTP, Pioneer, QUAESTOR, RCM.
While the majority of the fund managers continue to no change in the BUX index in the next three months, the ratio of optimistic views has grown since our last poll. The answers provided by the 17 fund managers in the survey show that the ratio of those projecting a 5-15% rise in the index has risen compared to a month ago.
The split in views on a 12-m horizon has widened among the fund managers since last month. The confidence crisis on the world's money markets and rising fears about a downturn in the world economy increased the ratio of those who project a more pronounced negative shift in the BUX index, but they are still outnumbered by those who forecast a positive change.
Although liquidity dried up again in the financial sector in the past weeks and several banks have approached a state of bankruptcy in the west, the majority of the fund managers still named OTP as their top pick, although the financial institution may be the most affected by market turbulences in Hungary. The valuation advantage of OTP Bank over its regional sector peers has lessened a lot, but the market is currently keeping a close eye primarily on the banks' capital situation and OTP is solid in this respect (proceed from Garancia sale, rumour about selling its Serbian unit). This time the banking paper was mentioned two times less than last month, but two fund managers who named OTP as their top pick a month ago were unable to participate in the current survey.
2008.10.03 05:00
A series of profit warnings on the Hungarian horizon? - Portfolio.hu Quarterly Poll
MOL garnered one more vote as a top pick than a month ago. The outlook on the oil company can become even brighter as it is en route to boost its 25% stake in Croatia's INA to over 50%. Magyar Telekom was mentioned by exactly the same number of fund managers as last month, but the progress of pharmas is most apparent.
Both Richter and Egis were mentioned three fund managers more than last month, therefore the papers' relative overperformance in the past few weeks may not be so surprising.
In an attempt to flee market turbulences the investors probably start to seek more defensive sectors, which could benefit drug papers. Of the small caps, Rába , Linamar and Danubius managed to boost their appeal.
Stocks rock!
The fund managers considerably over-represent Hungarian stocks compared to their own benchmark, which confirms our previous conclusion that in the wake of major drops the pros tend to pencil in a turnaround on the stock markets. The last time for such a huge ‘overweight' was in May this year."
Source: Portfolio Online Financial Journal
06.10.2008