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23rd November, 2023

AKK unveils new retail bond

State debt manager AKK yesterday rolled out a new Premium Hungarian Government Bond (PMAP) for retail clients, available from November 29.

The 2032/I series bonds, maturing on April 22, 2032, will have a “hybrid” interest rate structure during the nine-year maturity, with a higher premium in the last three years of its maturity.

However, it will pay a fixed 9.9% interest, or 13.9% when annualised, during the first 18-month period between November 29, 2023 and April 22, 2025.

In the following four years, the instrument turns into a variable interest rate bond with an interest premium of 0.5% above inflation, which rises to 1.0% in the last three years, between April 2029 and April 2032.

The new retail bond is less favourable for investors in the short term compared to the previous inflation-linked series, (2033/I) which will pay an 18% yield in 2024, based on the projected annual average inflation for 2023.

After that period, it offers a 0.25 percentage point interest premium above inflation, Portfolio commented.

The lower yield, of as much as eight percentage points, payable on the new series could mean significant savings for the budget.

The rollout of the new bond also underscores the government’s efforts to channel households’ savings into government bonds, Portfolio adds. (portfolio.hu; index.hu; hvg.hu; novekedes.hu; privatbankar.hu)
23rd November, 2023

Rough year for building material makers

Building materials makers scaled back or shut down production as demand plummeted in 2023, according to building materials and construction product association Measz.

Turnover of fired ceramic brick and tile products decreased by 40-50% year-on-year, or more depending on the product type, in the January-October period, said Measz.

Local insulation producers have also scaled back production by reducing shifts and downsizing.

The sharp decline in construction orders is attributed to rising financing costs, the decline in household purchasing power and the postponement of state investments.

In addition, there is a wait-and-see attitude among buyers expecting prices to fall further.

Measz notes that there is limited scope for that, due in part to the rise in wages.

The lower production output is not affecting delivery times, as traders and manufacturers have ample stocks on hand, it adds. (uzletem.hu)
23rd November, 2023

Used car sales rise by 8%

Used car sales in Hungary were up 8.1% year-on-year to 73,700 in October, the highest monthly reading in 2023, listings site JoAutok reports, citing figures compiled by DataHouse.

JoAutok CEO Bertalan Halasz said it is “too early to speak about a trend reversal”, as household income and high interest rates continue to affect the market.

A chart published by JoAutok shows that transactions bottomed out in February with 60,708 cars sold and hovered around 68,000-71,000 between May and September.

Full-year sales could top last year’s record of 825,000, given that demand was subdued in the last two months of 2022, Halasz added.

Used car sales in the first ten months fell by 1.6% from the same period of last year to 689,900. The number of imported used cars was 18% lower at 89,300 during the period. (mfor.hu; origo.hu; hvg.hu; autoszektor.hu)
23rd November, 2023

Yields lower at T-bill auction

The first government security auction after the MNB’s latest 75-basis-point rate cut produced falling yields on Thursday.

Yields at the bi-monthly auction of the six-month T-bills dropped to 8.25% on Wednesday, compared to 8.47% two weeks ago, nine basis points under the secondary benchmark.

The AKK sold Ft 30.5 billion of the security, raising its offer by Ft 10.5 billion after receiving Ft 69.3 billion in bids from primary dealers. (tozsdeforum.hu)

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