New Hungarian small cap papers are listed in the regional index

The reweighting of CEE Plus index at the end of June will bring minor changes for the Hungarian companies.

For the first time from July, the small cap papers of Masterplast, Waberer’s and Rába will be traded in the stock basket calculated by the Warsaw Stock Exchange, which contains the largest listed companies in the seven regional countries (Czech Republic, Croatia, Poland, Hungary, Romania, Slovakia, Slovenia), while the papers of Appeninn, Delta Technologies, Nutex and, from the beginning of April due to a supervisory sanction, OTT-One will be delisted.

The delisted domestic shares together represent barely half a thousandth of the weight in the index, and the three Hungarian newcomers will represent only one-tenth of a percent. For the companies concerned, thus, inclusion is more of a prestige value.

Larger investment and pension funds rather follow the regional MSCI benchmark and the CECE index of the Vienna Stock Exchange, so OTP’s weight gain of half a percent is not expected to be a major purchasing incentive in the domestic large banking market, which, with 9.88%, is still going to be the second largest component of the regional index behind Erste. Mol’s weight will fall by roughly 10 basis points, and Richter’s will rise by a similar amount, so the two big cap papers will switch places, and the pharmaceutical company will slightly outpace the domestic oil stock. However, the size of Magyar Telekom, Opus, 4iG and Akko will not change significantly either.

Due to the abovementioned changes, from July, ten fewer Hungarian papers will be traded in the CEE Plus basket, however, the weight of the Hungarian stock market, decisively due to OTP, will increase by 0.6 percent to over 17 percent.

More far-reaching changes are coming for the Polish companies, and the two retail giants recently debuted on the Warsaw Stock Exchange have already gained significant proportions. The Allegro internet trading house, also nicknamed “Polish Amazon”, will be listed in the stock index with nearly four percent of the sixth highest weight, and Pepco, which continues to build on its traditional store network rather than the online space, will be 28th with 0.76 percent in the 153-member basket.

In fact, Pepco, a distributor of clothing and home furnishings, accomplished a successful first half of 2021 closed at the end of March, according to a report released Thursday morning. The turnover of the company, which already owns 3,246 units across Europe, almost 200 of them in Hungary, increased by 4.4 percent to €2 billion, and its EBITDA increased by almost 17 percent to €324 million, generating a 90-million after-tax profit. Due to the strong result ensured by the in-store expansion continued both the second and third waves of the pandemic, Pepco has opened 225 new stores in half a year.

Regarding the outlook, the management highlighted that the operating environment will continue to be volatile in the short term due to the high degree of uncertainty caused by the virus and its newer variants, but in the longer run this uncertainty will decrease as consumer habits normalize and restrictions are lifted.