By Jason Hovet PRAGUE, May 18 (Reuters) – The Hungarian forint fell almost 1% on Thursday as Central European currencies continued to pull back from recent highs, while a proposed Czech law change that eased the path to a possible CEZ split helped the The utility’s stock price soared sharply down. The forint hit a 13-month high on Tuesday, with high interest rates still pulling investor demand for Central European assets. However, a strong dollar cuts off some of that appetite as investors turned to safety. On Thursday, the dollar hit a seven-week high as US officials worked toward a deal to raise the country’s debt ceiling to avoid defaults. The forint, meanwhile, had lost 0.95%, reaching a low of 373.50 against the euro at 1123 GMT. “I attribute today’s significant weakening to risk averse sentiment in international markets,” said a trader in Budapest. Markets also looked ahead to a meeting of Hungary’s central bank next week, where some analysts see opportunities for policy easing. Elsewhere, the Czech koruna fell 0.1% on the weak side of 23,700 and to a seven-week low. The Romanian leu fell 0.2% and the Polish zloty fell 0.7% against the euro to 4.544, having reached a nearly two-year high of 4.480 in the previous session. “The current weakness of the zloty should still be considered a correction,” said Bank Millennium. In stock markets, shares of the Czech Republic’s majority state-owned company, CEZ, fell about 6% after the government backed a bill that cut the shareholder majority needed to approve restructuring of public companies, making it an easier path to possibly split the utility. CEZ shares rose this year with a record dividend and as the state discusses restructuring or splitting the country’s dominant electricity producer, part of efforts to gain more control over energy production following a rise in prices last year. Analysts said it weakens the rights of minority shareholders and gives the state, with its 70% stake in CEZ, a free hand in decisions. CEE SNAPSHO ON MARKETS T 1323 CET CURRENCIES Last Previous Daily change s bid slot change in 2023 EURCZK Czech EURHUF Hungary 0 0 EURPLN Polish EURRON Romanian EURRSD Serbian 0 0 Note: Calculated from 1800 daily CET change Last Previous Daily change s slot change in 2023 .PX Prague 1327.09 1340.13 -0.97% +10.43 00 % .BUX Budapest 46241.4 45859.3 +0.83% +5.59% 6 0 .WIG20 Warsaw <.WIG20 1950.49 1933.08 +0.90% +8.84% > .BETI Buchares 12239.6 12235.9 +0.03% +4.94 % t 2 8 Spread Daily vs Bund change in Czech spread Republic CZ2YT= 2 years s CZ5YT= 5 years s CZ10YT s Poland PL2YT= 2 years s PL5YT = 5 years s PL10YT s FORWARD 3×6 6×9 9×12 3M interbank Czech Hungary Poland Note: are for ask FRA prices quotes ************************** *************** **** ******************** (Report by Jason Hovet in Prague, Boldizsar Gyori in Budapest and Karol Badohal in Warsaw; Edited by Shweta Agarwal)
CEE MARKETS – Forint Pulls 1%, CEZ Stocks Hit by Law Ease Way to Split
