×

CEE MARKETS-Warsaw leads stocks lower; currencies, bond markets ignore dovish ECB

ECB@

* Stocks mostly drop on corporate news, EU sentiment

* Warsaw's PZU leads equities decline

* Currencies, bonds shrug off Draghi's dovish comments

BUDAPEST, May 30 (Reuters) - Warsaw lead a retreat of Central European shares as investors, underwhelmed by dividend payments and takeover offers announced by some companies on Tuesday, booked profits from multi-year highs of recent weeks. Worries over the vote in Italy weighed on investor sentiment across Europe, though its main impact was on bank shares in the European Union. Central Europe's main equities indices reached multi-year highs earlier this month, helped by reports of good first-quarter earnings and dividend payments. Bucharest retained its momentum and again set a new nine-year high on Tuesday, but Warsaw shed 1 percent, Prague 0.6 percent and Budapest 0.4 percent by 0848 GMT. The decline in Warsaw was led by PZU, the biggest Polish insurer, whose stocks fell by about 3 percent after it said it would pay a dividend of 1.4 zlotys ($0.3740) per share. PZU shares hit two-year highs hit last week. "The market seems to be disappointed by the amount of dividend," said Jaroslaw Janusz, broker at Nobel Securities. An announcement by Polish pensions fund Aviva OFE that it had reduced its stake in PZU to below 5 percent may also be driving shares lower, Janusz said. Polish state-run energy firm PGNiG also shed 3 percent after surging last week due to good first-quarter results. Elsewhere, the shares of Hungarian mortgage lender FHB fell 2.8 percent after an offer from Takarekbank to buy out shares at 533 forints ($1.93) each. Czech oil group Unipetrol shares, trading ex-dividend, fell 2.5 percent. Regional currency and government bond markets were mixed and directionless, shrugging off comments from European Central Bank head Mario Draghi that the euro zone still needs substantial stimulus given that growth is improving but inflation remains subdued. In past years such dovish comments would often have lifted government bonds. However, in Hungary the central bank's loose policies have already pushed yields to very low levels, with the short end of the curve trading near record lows, traders said. "The Draghi comments were not a game changer," one said. "They (the ECB) often talk more than they act." The forint and the kuna eased a shade against the euro, even though Hungary reported a surge in first-quarter investments, while Croatia's industrial output fell 0.6 percent in annual terms in April.

CEE MARKETS SNAPSH AT 1048 CET

OT CURRENCIES

Latest Previo Daily Change

us

bid close change in

2017

Czech crown 26.517 26.500 -0.06% 1.85% 0 0 Hungary 308.20 308.00 -0.06% 0.20% forint 00 50 Polish zloty 4.1825 4.1841 +0.04 5.29%

%

Romanian leu 4.5650 4.5658 +0.02 -0.66%

%

Croatian kuna 7.4210 7.4145 -0.09% 1.81% Serbian dinar 122.54 122.67 +0.11 0.66% 00 00 % Note: daily calculated previo close 1800 change from us at CET

STOCKS

Latest Previo Daily Change

us

close change in

2017

Prague 1006.7 1012.9 -0.61% +9.24 3 0 % Budapest 33997. 34138. -0.41% +6.23 37 11 % Warsaw 2300.7 2323.5 -0.98% +18.1 3 8 1% Bucharest 8719.2 8673.5 +0.53 +23.0 2 0 % 7% Ljubljana 780.49 785.95 -0.69% +8.77

%

Zagreb 1856.6 1853.4 +0.18 -6.93% 9 2 % Belgrade 718.95 717.64 +0.18 +0.22 % % Sofia 652.49 655.51 -0.46% +11.2

6% BONDS

Yield Yield Spread Daily (bid) change vs change Bund in Czech spread

Republic

2-year -0.094 0.089 +061b +8bps

ps

5-year -0.071 -0.008 +036b -2bps

ps

10-year 0.749 -0.01 +044b -2bps

ps Poland

2-year 1.922 -0.092 +263b -10bps

ps

5-year 2.704 0.009 +313b +0bps

ps

10-year 3.28 0.007 +297b +0bps

ps

FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M

interb ank

Czech Rep <PR 0.36 0.42 0.49 0

IBOR=>

Hungary <BU 0.19 0.23 0.29 0.15

BOR=>

Poland <WI 1.752 1.78 1.807 1.73

BOR=>

Note: FRA are for ask quotes prices ********************************************************* ****

(Additional reporting by Bartosz Chmielewski in Warsaw; Editing