Hungary: Euro Area Convergence and Equity Rerating

Goldman Sachs upgrades Hungarian equities to overweight, targeting a BUX level of 150,000, driven by expected valuation re-rating as Hungary converges toward Euro area Maastricht criteria.

Key Takeaways

• 1.Hungary's goal to fulfill Maastricht criteria by 2030 for Euro area entry is expected to drive a structural re-rating of Hungarian equities.
• 2.Complete convergence of long-end interest rates to Euro area levels (~190bp lower) could re-rate BUX index valuations by 16–18%.
• 3.Goldman Sachs has revised the 12-month BUX target to 150,000 and upgraded Hungarian equities to 'Overweight' within EM allocations.

Table of Contents

• Convergence in Rates Could Drive A Structural Re-rating in Equities
• Integration with the Euro Area Could Unlock Export Opportunities
• A Welcome Gift Upon Entry to the Euro Area
• TRADE IDEAS

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