The duplicated turnover of the spot market of the Budapest Stock Exchange (BSE) declined by nearly 40% year on year, totalling less than HUF 5,000 billion. The annual turnover was the smallest on record since 2005. The bourse performed poorly in December too, with its turnover down 48% yr/yr and 49% month on month. Erste generated the largest turnover among the local brokerages also in 2012, but it still recorded a massive yr/yr decline.
Investors hoping for a Santa Claus Rally last year were disappointed, as the December Effect failed to bring substantial rises in key stock indices. It also had to do with the fiscal cliff in the U.S., because this problem kept markets under pressure. As a consequence, S&P 500 rose a mere 1% in the traditionally strong last month of the year. But the BUX index managed to underperform even that and the Hungarian benchmark stagnated in Dec 2012.
Looking at 2012 as a whole, the weak performance of the Budapest bourse is still highly apparent. The BUX index rose 7% last year, which is way worse than how its key regional peers fared.
The duplicated turnover of the spot market of the BSE dipped by 48% year on year, totalling HUF 257 bn. The Dec figure is the lowest for this month since 2006.
The considerable decrease in turnover in the last month of the year is attributable to diminished trading activity. The number of transactions came in 55% below the base period’s data.
It is also worth taking at look at the turnover per transaction figure too, which remains at depressed levels despite a yr/yr rise recorded in the past four months. The largest increase, nearly 40%, was observed in November, but that could be partly attributed to Richter, which was under massive sales pressure over its exclusion from the MSCI EM index. In the second half of the month institutional investors more actively traded Richter shares.
The longer-term trends continue to paint an unfavourable picture. The 12-month trailing turnover has been dropping sharply since the summer of 2010. The latest figure marks the lowest turnover recorded since 2004.
Spot market turnover on the BSE totalled HUF 4,851 bn in 2012, down by nearly 40% in annual terms. This means that the local bourse beat the negative records reached during the crisis years. The only time it performed even worse than this was in 2005.
The ditching of Richter from the MSCI EM index brought about a rearrangement of weights, which caused some changes in the ranking of the biggest brokerages in terms of turnover generated. Companies focused on institutional investors stepped up in this “race" in November, but the market almost returned to its former self in December, although Erste failed to finish on top, it came in only second. Concorde was the first and Wood retained its third place.
As for the whole year, Erste recorded the largest turnover, just like in 2011, but its turnover still shrunk by 46% in annual terms. No such a massive decrease was observed at the other players, though.
Erste played the greatest part in the decline of the total turnover, but Concorde, UniCredit and KBC also had their share in this respect.
Looking at how large a slice of the market the individual brokerages managed to carve out, Erste has lost the most, having its share of total turnover decline significantly since 2010.
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