CEE MARKETS-Poland's PKN Orlen plunges, currencies continue rebound

Reuters
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WARSAW, Dec 6 (Reuters) - Shares in PKN Orlen fell on Friday after Poland's biggest refiner surprised investors with a plan to take over state utility Energa to strengthen its position in the electricity market. The offer of seven zlotys per share, which values Energa at 2.9 billion zlotys ($743.78 million), caused PKN Orlen's shares to fall more than 10% in early trade, as investors fretted over the prospect of the company's involvement financing a costly power-plant project. Energa plans to build a coal-fuelled power plant in Ostroleka, in northeastern Poland, at a cost of around 6 billion zlotys, but it's struggling to secure financing. Many banks are refusing to back such projects for environmental reasons. PKN's slide helped drag Warsaw's blue-chip WIG 20 index down 1.2%. Energa shares were up over 5%. "Strongly negative news for PKN," Trigon analyst Michal Kozak wrote in a note. "The offer for Energa increases the likelihood of financing/co-financing Ostroleka C." Other stock markets in the region gained, with Prague's PX index up 0.27% and Budapest's main index up 0.19%. Currencies continued to rebound, as investors took heart from renewed optimism over the chances of a U.S.-China trade deal after upbeat comments from Donald Trump on trade talks. "It's moving along very well," Trump told reporters when asked about the talks on Thursday. The Polish zloty gained 0.13% against the euro to 4.2714. The Hungarian forint rose 0.08% to be bid at 330.32. The Czech crown was flat at 25.525. Benchmark Polish 10-year bond yields were little changed at 2.028%. Czech 10-year yields fell 3 basis points to 1.483%. "In our view, local conditions, which include low supply of government bonds and emerging signals of the weakening economic growth in the euro zone affecting Poland's data, should support a decline in 10-year yields towards 1.90% in the coming weeks," PKO BP analysts said in a note. CEE MARKETS SNAPSHOT AT 1036 CET CURRENCIES Latest Previous Daily Change bid close change in 2019 EURCZK= Czech 25.5250 25.5240 -0.00% +0.71% crown EURHUF= Hungary 330.3200 330.6000 +0.08% -2.80% forint EURPLN= Polish 4.2714 4.2771 +0.13% +0.43% zloty EURRON= Romanian 4.7780 4.7803 +0.05% -2.60% leu EURHRK= Croatian 7.4370 7.4380 +0.01% -0.36% kuna EURRSD= Serbian 117.4200 117.5200 +0.09% +0.75% dinar Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2019 .PX Prague 1086.86 1083.9400 +0.27% +10.17% .BUX Budapest 44267.75 44182.07 +0.19% +13.10% .WIG20 Warsaw 2067.29 2092.12 -1.19% -9.20% .BETI Bucharest 9972.50 9961.05 +0.11% +35.06% .SBITOP Ljubljana 901.13 904.48 -0.37% +12.04% .CRBEX Zagreb 1992.66 1995.30 -0.13% +13.94% .BELEX15 Belgrade 773.40 779.85 -0.83% +1.54% .SOFIX Sofia 543.41 544.03 -0.11% -8.59% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT=RR 2-year 1.5350 0.0350 +221bp +3bps s CZ5YT=RR 5-year 1.2460 0.0040 +181bp +1bps s CZ10YT=RR 10-year 1.4830 -0.0330 +178bp -3bps s Poland PL2YT=RR 2-year 1.3850 -0.0100 +206bp -2bps s PL5YT=RR 5-year 1.7360 -0.0110 +230bp -1bps s PL10YT=RR 10-year 2.0280 -0.0010 +233bp +0bps s FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M interbank Czech Rep <PRIBOR= 2.23 2.23 2.17 2.18 > Hungary 0.26 0.29 0.32 0.17 Poland 1.73 1.70 1.65 1.71 Note: FRA are for ask prices quotes ($1 = 3.8990 zlotys) (Reporting by Alan Charlish, editing by Larry King)

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