(Repeats story published late on Wednesday)
* Demand twice offer at tenders, but Czech offer slashed
* FX touch higher, stock rise third straight day
* Volatility high with Greece still in focus
By Marius Zaharia and Jason Hovet
BUCHAREST/PRAGUE, Feb 10 (Reuters) - Investors jumped on
bond auctions in Poland and the Czech Republic on Wednesday as a
potential Greece rescue eased some pressure on emerging Europe,
though pricing and market reaction was mixed.
Stocks in the ex-communist region rose for a third straight
day but currencies struggled to hold onto gains as markets
looked ahead to a European Union summit on Thursday that will
largely tackle the problems of debt-ridden Greece.
Somewhat relieved markets gave a lift to Czech and Polish
bond auctions where demand was more than twice the offer, though
the Czech finance ministry cut the amount sold after a sharp
rise in yields. [] []
"A major interest from foreign accounts," Prague-based
Komercni Banka trader Dalimil Vyskovsky said.
"A big move in Greek and EU-peripheral yields was probably
behind this. There are continuing stories of Greece being bailed
out soon, so the market started buying risk assets today."
Dealers said the Czech ministry's approach hinted at an
international offer coming soon. []
Polish bond yields dropped up to 5 basis points along the
curve. Czech yields were mixed, with the yield of the 15-year
bond auctioned earlier rising around 6 basis points. <CZ15YT=RR>
Markets will look to a Hungarian auction on Thursday.
Investors' concerns over Greece and other euro zone periphery
economies have knocked the region's markets this year and
strategists say it is unlikely central European assets can
resume broader gains until those fears are quelled.
Euro zone countries were holding talks on Wednesday about
how to proceed with Greece. Sources in Germany's ruling
coalition said Berlin was in international and domestic talks
about possible aid to the southern EU member. []
LOOKING FOR ANSWERS
Analysts have said central European countries are in a
better position than euro zone periphery countries, and
government bond yields in the region have not jumped at the pace
seen in Greece, Portugal or Spain.
But until a concrete solution for Greece was hammered out,
analysts said the region would suffer.
"It cannot be expected that the situation will fully calm
down at least until Thursday when more can be known about what
the EU will do with Greek problems," Ceska Sporitelna said.
By 1630 GMT, the Polish zloty <EURPLN=> was 0.1 percent
stronger on the day, bid at 4.065 to the euro.
The Hungarian forint <EURHUF=> dipped 0.1 percent to 271.5
per euro and the Czech crown <EURCZK=> was steady. The Romanian
leu <EURRON=> rose 0.2 percent to 4.114 per euro.
Currencies have been held back in the past week, with the
Polish unit losing 1.5 percent after touching 13-month highs.
High market volatility over the last week forced mining
group New World Resources <NWRSsp.PR> to withdraw a 700 million
euro debt offer on Wednesday [].
Investors were also watching Poland's privatisation plan to
raise 27 billion zlotys this year -- a key driver for the zloty.
Poland priced a 16 percent stake in utility ENEA <ENAE.WA>
at 1.1 billion zlotys on Wednesday [].
"The disappointment on the Enea SPO at 16 zloty per share
(vs. the range of 15.5-17.) shows the fatigue in the market on
the strong increase in IPO/SPO supply, one reason we keep Polish
equities on neutral," Cheuvreux said in a note.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 26.067 26.072 +0.02% +0.96%
Polish zloty <EURPLN=> 4.065 4.067 +0.05% +0.96%
Hungarian forint <EURHUF=> 271.49 271.14 -0.13% -0.42%
Croatian kuna <EURHRK=> 7.316 7.32 +0.05% -0.09%
Romanian leu <EURRON=> 4.114 4.122 +0.19% +3%
Serbian dinar <EURRSD=> 98.573 98.52 -0.05% -2.73%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -4 basis points to 98bps over bmk*
7-yr T-bond CZ7YT=RR +4 basis points to +143bps over bmk*
10-yr T-bond CZ10YT=RR +1 basis points to +130bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -1 basis points to +391bps over bmk*
5-yr T-bond PL5YT=RR -4 basis points to +325bps over bmk*
10-yr T-bond PL10YT=RR -5 basis points to +291bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +12 basis points to +551bps over bmk*
5-yr T-bond HU5YT=RR +6 basis points to +519bps over bmk*
10-yr T-bond HU10YT=RR -13 basis points to +461bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1734 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
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emerging market news []
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(Reporting by Reuters bureaus, writing by Marius Zaharia and
Jason Hovet; Editing by Patrick Graham)
