Hungary

Arthi Gupta
23 Dec, 2010
New York City

The European indexes declined after Fitch lowered Hungary''s credit rating. French industrial producer price index rose in November. Hungary''s trade surplus fell in October. Spanish PPI climbed in November. Maersk Oil agreed to buy Brazilian assets for $2.4 billion.

[R]4:00 PM Frankfurt – The European indexes declined after Fitch lowered Hungary''s credit rating. French industrial producer price index rose in November. Hungary''s trade surplus fell in October. Spanish PPI climbed in November. Maersk Oil agreed to buy Brazilian assets for $2.4 billion.[/R]

U.S. stocks fell after mixed economic data and Asian markets traded mixed and European markets traded sideways ahead of market closure tomorrow.

The Greek parliament on Thursday approved the government''s 2011 budget with austerity measures to reduce massive national debt. The latest budget is expected to reduce deficit to 7.4% of gross domestic product in 2011 from a projected 9.4% gap in the current year and to less than 3% by 2014.

Fitch Ratings downgraded the Republic of Hungary''s long-term foreign currency issuer default rating to ''BBB-'' from ''BBB'' and its long-term local currency IDR to ''BBB'' from ''BBB+''. The outlooks on the long-term IDRs remain negative.

""The downgrade of Hungary''s ratings reflects a material worsening in the underlying medium-term budget position, while relatively high levels of public, external and domestic foreign-currency bank debt leave the country vulnerable to negative shocks,"" said Ed Parker, Head of Emerging Europe in Fitch''s Sovereigns team.

In Paris CAC 40 Index declined 17.41 or 0.44% to close at 3,902.30 and in Frankfurt DAX Index edged lower 6.00 or 0.08% to close at 7061.92.

French Industrial PPI Rises, Consumer Spending Soars

French domestic industrial producer price index rose 4.5% annually in November, following October''s 4.3% increase, according to latest data from statistics office Insee released today.

On a monthly basis, producer prices climbed 0.4% in November.

French consumer spending climbed 2.8% in November, compared to a revised 0.6% fall in October, statistics office INSEE said.

The reason for the surge was a 14.9% spike on automobile consumption in November, reversing a 4.3% drop in October.

Annually, consumer spending rose 1.5% in November.

Poland Seeks Credit Line from IMF

Poland is seeking to replace its one year $21 billion credit line under the International Monetary Fund''s flexible credit line arrangement with a two-year precautionary credit line facility, amounting to $29 billion.

Hungary''s Trade Surplus Drops

Hungary''s trade surplus fell to €408.2 million in October from €540.4 million in September, latest figures from the Central Statistics Office showed.

Spanish PPI Up

Producer prices in Spain rose 4.4% on a yearly basis in November, as against the 4.1% increase in October, statistics office INE said.

On a monthly basis, producer prices edged higher 0.3% in November after a 0.6% rise in October.

Maersk Oil Buys Brazilian Assets

Maersk Oil, a fully-owned subsidiary of A.P. Moller-Maersk agreed with SK Energy Co. Ltd. to acquire SK do Brasil Ltda. for $2.4 billion on a cash and debt-free basis.

The acquisition gives Maersk Oil access to sizeable pre-salt assets offshore Brazil, one of the most prolific regions in the world for oil exploration and production. In addition, the acquisition offers a strong upside from blocks lying in the Campos Basin as exploration prospects are tested.

The acquisition comprises a 40% stake in the Polvo field, a 20% stake in the Wahoo discovery and a 27% stake in the Itaipu discovery.

Gainers & Losers

AstraZeneca PLC fell 0.26% to $45.80 after the biopharmaceutical company and Abbott Laboratories said it will discontinue their joint collaboration for the development of Certriad, which was being investigated for the treatment of mixed dyslipidemia.

Hannover Rueckversicherung AG declined 1.82% to €40.55 after the German reinsurance company announced a deal to sell all operational companies of its U.S. subsidiary Clarendon Insurance Group, Inc. to Hamilton, Bermuda-based Enstar Group Ltd. for $200 million.

Hightex Group Plc surged 7.86% to 7.00 pence after the company engaged in the design, production and installation of polymer membrane tensile said it won a contract for about €2 million, to fabricate and install a sculpture in Paris.

LM Ericsson Telephone Co. dropped 1.31% to $11.26 after the Swedish telecom equipment maker announced the acquisition of U.S.-Spanish telecommunications vendor Optimi Corp. Ericsson has not disclosed the terms of the transaction.

OMV AG dipped 0.55% to €30.50 after the energy firm completed the acquisition of a 54.14% stake in Petrol Ofisi A.S., one of the leading companies in the Turkish oil products retail and commercial markets, following the approval of the deal by the regulators and anti-trust authorities.

Rio Tinto Plc declined 0.94% to 4,536.50 pence after the miner said that it offered to acquire Australian coking coal miner Riversdale Mining for A$16 per share in cash, valuing the target company at about $3.9 billion.

X-5 Retail Group N.V. soared 5.65% to $45.06 after the Russian food retailer said it expects 2011 gross sales to surge 40% to exceed 500 billion ruble.

The increase in sales is anticipated to be driven by organic net sales growth in the low 20% range and the rest contributed by the Kopeyka acquisition.