Central Bank power shift prompts shakeup at Budapest Stock Exchange

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Hungary’s central bank has announced a reorganisation at the Budapest Stock Exchange, replacing deputy governor Marton Nagy amid a broader power shift among top officials.

Mr Nagy – who retains his position as deputy governor of the central bank – was appointed chairman of the BSE after the bank bought a controlling stake in it in November 2015, becoming the only central bank in Europe to control its main stock exchange.

Observers suggested the personnel change signalled a wider reorganisation within the central bank. Mr Nagy earlier resigned his membership of the advisory board of an educational foundation endowed by the central bank and championed by its powerful chairman, Gyorgy Matolcsy.

But Peter Attard-Montalto, head of Emerging Europe at Nomura International, said he did not believe the move would change Mr Nagy’s effective control over the bank’s extraordinary monetary policy, which targets growth and a weaker currency over time.

Mr Nagy’s term as BSE chairman coincided with a stellar performance by the bourse – the benchmark BUX index was up roughly 30 per cent in 2016, driven mainly by its four largest listed companies, OTP bank, oil and gas company MOL, Richter-Gedeon pharmaceuticals and Magyar Telekom.

But the BSE has struggled to draw major new listings, despite government efforts to attract fresh IPOs.

In a statement on its webpage, the bank said it had achieved its primary objectives and would step back from direct control:

The National Bank of Hungary as owner continues to hold as a strategic goal to transform and develop the BSE in a way that keeps the bourse in national hands.

Mr Nagy is expected to be replaced by Richard Vegh, BSE chief executive, who told Hungarian news website Portfolio.hu that a confirmation vote would be held on March 16th.

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