Fund managers forecast weakening Hungarian currency

The contributors to our survey were the following fund management companies: Buda-Cash, CIB, Concorde, Dialóg, Diófa, Equilor, ING, MKB, Pioneer, Plotinus, Quaestor, Raiffeisen.

An eventful month is behind the HUF. The exchange rate was affected by the Syrian conflict, the Federal Reserve’s decision not to taper its asset purchases just yet and budget woes in the United States that occurred in the second half of the month. The forint has been hovering around 300 to the euro throughout September and the cross finally closed at 297.43, 1.2% stronger than a month earlier.

Local fund managers polled by Portfolio.hu now have gloomier views on the HUF both for the short (3 months) and longer terms (12 months), with 33% of them projecting to see the forint 2-5% weaker compared to the 297.40 reference value three months from now and 8% of them forecasting EUR/HUF to weaken to above 312. The majority (58%), however, do not project a major shift in the exchange rate on this horizon.

The ratio of those projecting a 2-5% weaker forint for 12 months ahead has jumped to 50% from 25% a month ago, whereas the ratio of those forecasting a 5% plus HUF weakening on this horizon remained at 17%. In parallel with this change, presently 33% of the respondents expect to see the forint +/-2% from the reference value a year from now, which is 25 percentage points below the previous month’s print.

Once we combine the fund managers’ estimates into a single indicator we can see that the ratio of those projecting HUF weakening has increased both for the short and the long terms.

Outlook for the bond market

As the rise in yields in August was followed by a downward correction, the MAX index rose to 563.5 points from 547.2 ponits.

The majority of the fund managers had the same outlook on the MAX index, with 83% of them projecting that the index will be +/-2% compared to the 563.5 point reference value three months from now. Similarly to the previous survey 17% of the respondents expect a further drop in yields, i.e. a rise in the index on this horizon.

The fund managers’ views for 12 months ahead has not changed for the third consecutive month, with 50% of them expecting a 0-5% rise in the MAX index and the other 50% forecasting a 5-10% increase.

The slightly more upbeat outlook on HGBs is also reflected in the weighting of the bonds compared to the fund managers’ own benchmark. The ratio of underewighters dropped to 9% from 20% in our previous survey.

The ratio of net underweighters fell to 0% from 10%.

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• exchange rate,
• poll,
• survey,
• bond,
• fund manager,
• forint,
• BUX