* Strong German business survey boosts c. Europe stocks
* Russian rouble leaps to 16-mth high; CDS down
* Hungary stocks up; forint flat ahead of 2nd voting round
By Claire Milhench
LONDON, April 23 (Reuters) - Central European stocks and
bonds rose on Friday, boosted by better-than-expected German
business sentiment data, while the Russian rouble surged to new
16-month highs on the back of strong oil prices and a successful
bond issue.
News that Greece was requesting the activation of an IMF/EU
aid package also supported emerging European assets.
But other emerging markets were more subdued, with Hong Kong
and China <> dragged down by bank and property stocks after
new signals that the Chinese government plans further action to
curb property speculation.
"Markets are undecided how to treat Central Europe in the
light of the Greek issue," said Agata Urbanska, emerging markets
strategist at ING Bank in London.
"We are seeing some re-assessment of risk which could impact
emerging markets but on the other hand we are seeing some shift
of investors from the peripheral euro zone into central and
eastern European bond markets."
Poland, the Czech Republic and Hungary have held successful
local bond auctions this week, with Hungary seeing a bid cover
of 2.5 percent for its 10-year issue on Thursday. It placed the
paper at 6.4 percent on a day Greek yields spiked above 10
percent.
Central European stocks were helped by the German IFO survey
on Friday, which showed business sentiment rising much more than
expected in April to its highest level since May 2008. [].
The Czech market <> was up 0.92 percent and the Hungarian
market <> was up 1.5 percent, also helped by positive
sentiment ahead of this Sunday's elections where the
centre-right Fidesz party is expected to win a two-thirds
majority in parliament.
"The German IFO was good and ultimately will impact the
region's exports and industrial production," Urbanska said.
"Data on these has surprised on the upside in recent months."
The rouble <RUS=MCX> hit a new 16-month high against the
euro-dollar basket at 33.56, boosted by strong oil prices and
Russian exporters converting money for month-end tax payments.
The central bank moved the rouble's floating corridor again,
the 30th move since mid-February.
Thursday's successful launch of Russia's first Eurobond
since its 1998 domestic default also helped support sentiment.
The placement raised $5.5 billion, with the issue two times
oversubscribed. []
The cost of insuring Russia's debt against default fell in
the 5-year credit default swaps market to 139.4 basis points,
from 144.9 basis points at Thursday's close, according to CDS
monitor CMA DataVision.
"The success of the Russian issuance yesterday illustrates,
in our view, that emerging markets should not be impacted
strongly, as long as a scenario of reasonably global strong
recovery supports the outlook for commodity exporters or
exporters of manufacturing goods," said analysts at Credit
Agricole in a note.
UKRAINE CDS FALL
Benchmark emerging equities <.MSCIEF> were flat, with China
down 0.53 percent and Israel down 0.82 percent. Turkish markets
were closed for a public holiday.
Emerging sovereign debt spreads <11EMJ> narrowed by 1 basis
point to 244 basis points over U.S. Treasuries.
Ukraine's rehabilitation in the eyes of global investors
continued, its five-year credit default swaps falling 16 basis
points to 540 bps. Hungarian, Egyptian and Turkish debt
insurance costs also fell.
However, Thursday's Eurostat data showing that the Greek
deficit was worse than previously thought weighed on Eastern
European currencies in early trade.
The Czech crown was affected by central bank talk that rates
could be cut. [].
Some Polish central bank rate-setters too have said this
week they may consider rate cuts to rein in zloty appreciation.
The forint was flat against the euro <EURHUF=> as investors
held fire ahead of the election. Hungary's central bank is
expected to cut interest rates on Monday by 25 basis points.
South Africa's rand <ZAR=D3>, meanwhile, slipped to a
seven-week low against the dollar, tracking weakness in the
euro, the currency of its main trading partner.
(Additional reporting by Carolyn Cohn and Sujata Rao; Editing
by Susan Fenton)
