Hungary good growth outlook more than 3% with stable exchange rate.

 

The picture shows the map of Europe with GDP growth forecasts for the various member states with a table on the right that refers exclusively to those planned for Hungary.

Source: European Commission – Economic Forecast for Hungary

 

The latest outlook of the European Commission confirms the goods economic perspectives for Hungary (Economic forecast for Hungary). For this year and next year, the growth rate will tend to go beyond the 3% threshold in a virtuous context, mainly characterized by a stable cross EUR/HUF.

The country attracts foreign investment due to the incentives of the Hungarian government but also due to qualified human resources; low labor costs; high productivity compared to salary. Moreover EU development aid must be should be mentioned here by an active use of the Structural Funds and the Cohesion Fund.

 

The daily bar charts highlights the bullish trend of Budapest Bux Index for the stock exchange of Hungary.

InchCapital Platform – Data Source: Fida

 

As we have already had the opportunity to reiterate on other occasions, the movement of financial markets often anticipates the good news on the economic situation. The Bux stock index is some of the strongest European equity indices, analyzed in terms of trend / momentum. Perspectives are still rising and will be confirmed, with targets at 38,851 (short-term) and 39,960 (medium-long term), until there has not been a daily close below 37,436 (short-term) or a weekly close below 35.984 (medium-long term). Read more: BUDAPEST BUX

 

The weekly bar chart shows the strong bullish long/term trend of the ETF OTP BUX I TRACK.

InchCapital Platform – Data Souce: Fida

 

In order to operate on the Budapest Stock Exchange, it is preferable to use liquid securities with low volatility. Most of the stocks show high volatility. Please note that in the last summer months the first five stocks of the BUX Index in terms of strength (EST MEDIA ORD, NORDTELEKOM NYRT, OPIMUS GROUP ORD, BIF RT ORD and CSEPEL ORD) recorded an average performance of more than 200%.

We therefore prefer to follow the ETF OTP BUX I TRACK (HU0000704960 [HUF]). This is an ETF of an open non-Harmonized Hungarian Fund directly linked to the BUX index, read on: OTP BUX I TRACK

 

The weekly bar chart shows the long/term sideway phase of the Euro vs. Hungarian forint.

InchCapital Platform – Data Source: Fida

 

In conclusion, with regard to exchange risk, we do not expect any particular surprise at this time. Indeed, it is possible that in the course of time we can see a progressive appreciation of the HUF vs. Euro. In recent years, the sideway trend of this cross has always been contained between 305/295 (current prices) and 320.