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Nov 07, 2016

Budapest stock at record highs after Moody's elevates Hungary to investment grade

Moody's upgrade had been widely anticipated as both Fitch and Standard & Poor's had already lifted Hungary to investment grade earlier this year

Budapest stocks have risen to record heights after Moody's lifted Hungary's credit rating to investment grade, echoing similar upgrades by Fitch and Standard and Poor's earlier this year.

Reuters reports that Budapest's main index gained 0.9 percent this morning, slightly off a record high hit at 30,321 points right after the opening.

Moody's upgrade had been widely anticipated as Fitch and Standard & Poor's had already lifted Hungary to investment grade earlier this year.

"The upgrade, the third this year, will definitely open the purse of new investors. But such things do not happen overnight, it will take some time," one Budapest-based fixed income trader told Reuters.

The upgrade could pave the way for a eurobond issue by Hungary, Raiffeisen said in a note on regional markets.

It can also make forint-denominated, long-end bonds attractive after a 20-25 basis-point rise in long-end yields in the region in the past two weeks, driven by global factors, analysts said.