* Forint falls to a fresh record-low
* Dealers cite regional play, favouring crown
* Romanian Q4 GDP data worse than expected, leu steady
(Adds bank regulators' statement)
By Dagmara Leszkowicz
WARSAW, March 4 (Reuters) - The Hungarian forint fell to a
record low on Wednesday as investors shorted it against emerging
European peers in a sign investors may be starting to single out
the weaker economies in a months-long regional sell-off.
Dealers said investors were buying the Polish zloty and
Czech crown against the forint, pushing the Hungarian unit down
more than 1 percent while other currencies hovered around
Tuesday's domestic close levels.
At 01050 GMT the forint <EURHUF=> had fallen 1.2 percent to
309.65 per euro after trading as low as 312.25. The zloty
<EURPLN=> was steady around 4.735 and the crown <EURCZK=> edged
up to 27.76 to the euro.
"There's a recommendation on the market to sell forint for
the Czech crown," said Jakub Wiraszka, dealer at BRE bank in
Warsaw.
Dealers have said rumours on Tuesday of crown buying from
French drug maker Sanofi-Aventis <SASY.PA> for its stake hike in
Czech generics drug maker Zentiva <> have also helped
the Czech currency outperform this week.
A Sanofi spokesman in Paris had no immediate comment on
Tuesday. Sanofi succeeded in a 1,150 crown per share bid for
Zentiva last month -- valuing the company at 43.9 billion crowns
-- and raised its stake to 94 percent from 24.9 percent.
But some dealers suggested the cross play may signal a
beginning of differentiation in the region, in line with a push
by Polish and Czech policymakers to treat countries on merit and
not central Europe as a monolith.
Currencies have dropped to near record lows in the past
month as economic outlooks darken due to lost demand for the
region's goods in the euro zone, along with concerns over many
countries' heavy reliance on foreign debt.
In Romania fourth quarter growth fell sharply to 2.9 percent
year-on-year, from 9.2 in the third, and well below market
expectations, data showed Wednesday. []
The leu <EURRON=> ticked up to 4.289 versus the euro after
having shrugged off confirmation on Tuesday that the country was
in talks with the IMF to secure help to finance its vast
external shortfall [].
BANKING WORRIES "MISLEADING"?
Banking regulators in Poland, the Czech Republic, Slovakia,
Romania and Bulgaria issued a statement expressing concern about
"misleading" comments on risks in their financial sectors, and
dealers said the fact that Hungary was missing contributed to
the forint's fall <EURHUF=D2>.
Hungary authority PSZAF later said it had also signed the
statement, but Budapest may also be bearing the brunt of the
sell-off thanks to years of poor growth and state overspending,
underlined by more negative news on debt ratings this week.
In Poland, analysts said the currency may weaken further due
to overexposure of Polish companies to wrong-way bets on
currency options set when the zloty was at record highs in the
summer. A lack of political agreement on entry to the euro
testing ground ERM-2 also added pressure.
Early on Wednesday two central bankers cast doubt on the
centre-right government's ambitious plans to prepare Poland for
entry to the euro zone in 2012, but also called for a compromise
as a political deadlock was unfavourable for the
currency.[]
"We've seen some interest in the zloty/forint, with people
buying the Polish unit and selling the forint on a play maybe
for the euro (entry)," said a London-based dealer. "It's mainly
cross playing (hitting the forint)."
Bond markets were mixed in the region before Polish and
Czech auctions later in the day, seen as tests for demand.
"As sentiment hasn't changed yet and public finances are
struggling with worsening economic outlook and intensified
worries over potential difficulties in refinancing debt, we see
similar poor demand today," dealers at Komercni Banka said in a
note.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 27.76 27.865 +0.38% -3.63%
Polish zloty <EURPLN=> 4.735 4.736 +0.02% -13.09%
Hungarian forint <EURHUF=> 309.65 306.1 -1.15% -14.89%
Croatian kuna <EURHRK=> 7.39 7.423 +0.45% -0.34%
Romanian leu <EURRON=> 4.289 4.297 +0.19% -6.4%
Serbian dinar <EURRSD=> 94.27 94.19 -0.08% -5.08%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +23 basis points to 257bps over bmk*
4-yr T-bond CZ4YT=RR -9 basis points to +258bps over bmk*
8-yr T-bond CZ8YT=RR -17 basis points to +314bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -7 basis points to +455bps over bmk*
5-yr T-bond PL5YT=RR -6 basis points to +385bps over bmk*
10-yr T-bond PL10YT=RR -9 basis points to +318bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -27 basis points to +1210bps over bmk*
5-yr T-bond HU5YT=RR -64 basis points to +1055bps over bmk*
10-yr T-bond HU10YT=RR -55 basis points to +864bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1152 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Dagmara Leszkowicz;
editing by Patrick Graham)
