The biggest story of BSE in 07.

Mol, Hungary’s biggest oil and gas company and Eastern Europe’s largest oil refiner by market value ($16.4 billion), plans to buy back shares this year to reduce their number in the market. The stock has increased by almost 25% since last Friday (June 22nd) if we take into consideration Tuesday’s (June 26th) price trading which has propelled MOL to an all-time high passing HUF 30,000 level. It all started last Friday, when MOL bought 1 percent of the total shares of the company in order to prevent a possible hostile takeover by another market player.
Megdet Rahimkulov, a former OAO Gazprom executive and Hungary’s richest billionaire, bought in the past month a significant stake of the company which as press releases such as Bloomberg claim was in turn sold this weekend to Vienna Capital Partners, who in turn sold the stake to Austrian oil company OMV. On Monday, OMV announced that they upped their stake to 18.6 percent from 10 percent which they already owned. The Austrian oil firm said they bought additional shares of MOL in order to entice closer alliances between the two companies amid energy sector consolidation. Reuters claimed on Sunday night that “the company is convinced by the long-term benefits of a closer cooperation.” The Austrian oil refiner thinks that a partnership between them could result in a good combination as they both have strengths in the regional central European market, preparing themselves to the unavoidable sector consolidation over the next 2-3 years. OMV said that they paid close to the market price for the 8.6 percent additional shares bought from Vienna Capital Partners. This would imply they paid a price close to 1 billion Euros for this stake. Partly because there has been some speculation in the market that MOL could become the target of a possible take-over, as well as investors speculate that MOL and OMV could further push up the price of the Hungarian stock if they get into a race to see who will buy a further stake in MOL.
Some analysts believe that MOL will continue buying some of its own shares in order to avert a potential takeover. MOL released an announcement where the company effectively rejected OMV's former partnership request adding that they would pursue its own strategy and confirmed that it would continue its buy-back program.
This is a clear signal that MOL intends to defend its independency.

Surprise interest rate cut by .25 % to 7.75 %
Hungary's central bank cut for the first time in more than half a year the base rate by .25 percent to 7.75 percent percent. When there are interests rate cuts, the most benefited equities are the dividend paying-utilities like Emasz (Hungarian electricity), dividend paying-Telecom stocks (Magyar Telekom), and banks (OTP.) Even at 7.75 percent the Hungarian rates are the highest in the European Union. The Hungarian central bank's key rate compares with 2.75 percent in the Czech Republic and 4.25 percent in Poland and Slovakia. The National Bank claimed that further rate cuts will only materialize if the inflationary risk further decreases. Data published in the past month show that inflation has peaked (8.5% for May) and is showing a slowing trend.
Another detail worth mentioning for this week is that the BUX or Hungarian index is at-its all-time-high surpassing the 29,000 level on Tuesday. OTP is also trading at a historical record high, already through the psychological level of 10,000 HUF. Even though other international and regional markets have cooled off, the Budapest Stock Exchange (BSE) continues strong, mostly due to the heavy buying of Hungarian oil and gas MOL (which encompasses 33% of the BUX or Budapest Stock index.)