Equity 9 June 2021, 10:00am

Hungarian households keep nearly HUF 10,000 bn in gov’t securities

Portfolio

The volume of the three most popular forms of household investments, government securities, investment coupons and shares, increased by HUF 535 billion in January-April, compared to a nearly HUF 300 bn decrease one year earlier. Government securities remain the most popular category, nearing HUF 10,000 bn. There is a category that is growing even faster, that of bank deposits, but this is misleading.

HUF 535 bn growth in four months

According to the latest statistics from the National Bank of Hungary (MNB), the volume of the three most popular forms of household investments, government securities, investment coupons and shares, increased by HUF 535 billion in January-April.

The amount of government securities held by households grew by more than HUF 380 bn,
Investment coupons grew HUF 105 bn,
Followed by shares with HUF 50 bn growth.

Transaction-based data show slightly less fresh capital, HUF 487 bn, with the HUF 50 bn difference resulting from market value and currency effects. The prolonged rally of markets had a tangible effect on investment coupons and shares, as more than half of the increase in assets was due to this and not increased demand.

Government securities: closing in on HUF 10,000 bn

The amount of government securities held by households grew by more than HUF 380 bn by the end of April, passing the HUF 9,500 bn mark. The growth of the market slowed visibly in the past 12 months, mostly as a result of lower demand for the Hungarian Government Security Plus (MÁP+) ‘superbond’, but the targeted HUF 11,000 bn amount will probably be reached without a problem.

This also means that households had a 25.8% share in the government securities market at the end of April, so

households are currently the third biggest financers of Hungary.

Credit institutions and foreign investors still hold more of Hungary’s debt, and it is uncertain if households will ever rise to the top.

There is no substantial difference between the MNB’s statistics and quarterly transactions in the case of government securities, as volume changes are largely caused by interest payment and maturities, not by market movements.

Investment funds

The increase in the value of investment coupons exceeded HUF 105 bn. Although Hungarian investment funds saw significant funds withdrawn last spring due to the coronavirus crisis, the category recovered later in the year as the stock market rallied.

Among investment funds, mixed funds increased the amount of household assets managed most, by more than HUF 111 bn, followed by equity funds with HUF 55 bn growth.

Mixed funds manage the highest amount of household savings, more than HUF 1,200 bn.

The amount of shares held by Hungarian households showed hectic movements in recent quarters, and the category has more than made up for the major slump in Q1 2020.

Bank deposits – a misleading picture

There is one more category that has kept up growth month after month: bank deposits. According to the latest data, Hungarian households kept more than HUF 11,600 bn in deposits at the end of April, but this was merely due to the parking of funds, as the increase was in call deposits, not term deposits.