* Forint falls to a fresh record-low
* Dealers cite regional play, favouring crown
* Romanian Q4 GDP data worse than expected, leu steady
* Czech bond auction attracts interest, pricing worsens
(Adds bond auctions, quotes, updates prices)
By Dagmara Leszkowicz and Jason Hovet
WARSAW/PRAGUE, March 4 (Reuters) - The Hungarian forint fell
to a record low on Wednesday as investors short sold it against
emerging European peers, in a sign that investors may be
starting to single out the region's weaker economies.
Dealers said investors were buying the Polish zloty and
Czech crown against the forint, pushing the Hungarian unit down
more than 1 percent and boosting the crown 1.5 percent to a
one-month high. The Czech currency has gained 7 percent against
the euro in two weeks.
Hungarian Finance Minister Janos Veres said the forint's
fall was due to a general lack of confidence in eastern Europe,
news agency MTI quoted him as saying. []
At 1508 GMT the forint <EURHUF=> had fallen 0.9 percent to
308.9 per euro after trading as low as 312.25, but government
bonds stayed steady. The zloty <EURPLN=> was up 1.2 percent at
4.68 and the crown <EURCZK=> gained to 27.461 per 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 said rumours on Tuesday that French drugs maker
Sanofi-Aventis <SASY.PA> was buying crowns to raise its stake in
Czech generics drug maker Zentiva <> had also helped
the Czech currency to outperform this week.
A Sanofi spokesman declined comment on its FX operations.
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.
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.
"(Poland) is not Hungary. People are starting to look closer
into (the region) and realising that the forint is fundamentally
far weaker," a Warsaw dealer said.
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 economic growth fell sharply, data
showed Wednesday [], but the leu <EURRON=> ticked up
to 4.282 versus the euro. On Tuesday it also shrugged off
confirmation 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.
Dealers said the fact that Hungary was initially missing had
contributed to the forint's fall <EURHUF=D2>.
Hungary's PSZAF authority later said it had also signed the
statement. But Budapest may also be bearing the brunt of the
sell-off due 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 currency options set when
the zloty was at record highs in the summer. Lack of political
agreement on entry to euro testing ground ERM-2 added pressure.
Prime Minister Donald Tusk said on Wednesday that the zloty
should be much stronger against the euro by July.
On Wednesday two central bankers cast doubt on the
government's plans to prepare Poland for euro zone entry in
2012, but also called for a political compromise. []
"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.
A Czech 8-year floating rate bond auction saw a rise in
demand, but pricing worsened and signalled the government may
start selling its debt at any costs. Local bonds were little
moved by the auction. []
In Poland, the ministry sold 2.09 billion zlotys' worth of
2-year bonds and 640 million zlotys -- less than offered -- of
5-year bonds at a tender on Wednesday []
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 27.461 27.865 +1.47% -2.58%
Polish zloty <EURPLN=> 4.68 4.736 +1.2% -12.07%
Hungarian forint <EURHUF=> 308.9 306.10 -0.91% -14.68%
Croatian kuna <EURHRK=> 7.41 7.423 +0.18% -0.61%
Romanian leu <EURRON=> 4.282 4.297 +0.35% -6.25%
Serbian dinar <EURRSD=> 94.398 94.19 -0.22% -5.21%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +28 basis points to 262bps over bmk*
4-yr T-bond CZ4YT=RR -5 basis points to +261bps over bmk*
8-yr T-bond CZ8YT=RR -17 basis points to +313bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +5 basis points to +461bps over bmk*
5-yr T-bond PL5YT=RR -2 basis points to +387bps over bmk*
10-yr T-bond PL10YT=RR -8 basis points to +317bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +3 basis points to +1190bps over bmk*
5-yr T-bond HU5YT=RR +39 basis points to +1058bps over bmk*
10-yr T-bond HU10YT=RR +1 basis points to +837bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1611 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet and
Dagmara Leszkowicz; editing by Patrick Graham)
