Yesterday the two major parties’ Prime Minister candidates held a debate, which were transmitted through various Hungarian television channels. The majority of the comments pointed the Socialist candidate was more convincing than largest opposition party Fidesz’ candidate.
The latest poll results show that the Socialists could form Government in coalition with the Alliance of Free Democrats (polls failed to predict the result 4 years ago, but it might not be the case this year).
We would highlight that a Socialist coalition would be more supportive for the equity market, as a Fidesz led Government would pose more risk on the budget and on listed companies. A couple of recently cited targets of Fidesz are the following:
1) Reprivatize assets from MOL: Fidesz said the cushion gas sale was not fair and plans to get it back. It would be difficult though, as MOL already sold it to E.ON.
2) Curb Hungarian pharmaceuticals profits: The statement could be a threat for Egis and Richter.
3) Lately announced political promises would cost at least 16% of the 2005 GDP, putting burden on the budget deficit .