Bank analyst's words create political controversy in Hungary

The words of a bank analyst caused quite a stir in Hungary, when, speaking at a press conference on Monday, he said that the current strengthening of the forint may also be due to expectations of a possible change of government next year, as investors expect that a potential Tisza Party victory could bring about positive changes similar to those brought about by Donald Tusk's victory in Poland.

The analyst's statements were not so much about weighing the odds in next April’s election, as they were about the processes that a change in government could potentially set in motion.

Nevertheless it is also true that when it comes to placing actual bets on the outcome, many are betting on Péter Magyar's victory.

Speaking at a press conference on Monday, Dávid Németh, senior analyst at K&H Bank, summarized the state of the Hungarian economy and also discussed what can be expected in the run up to the elections and thereafter.

In the course of his speech, he also outlined market expectations, and it was in this context that he made the remarks quoted above, which were interpreted by some parts of the Hungarian press and the public as meaning that the market was betting on Tisza.

His statements quickly made the analyst the target of government politicians and the pro-government media. Even Viktor Orbán weighed in on the matter.

In a Facebook post, the Prime Minister wrote, among other things, that “The order has been placed. Yesterday, a leading analyst at a major Belgian bank also joined the anti-government chorus.”

K&H Bank also released a statement saying that several Hungarian media outlets had misinterpreted Dávid Németh's assessment of the current situation and emphasizing that “K&H is an independent financial institution and, as such, it never and under no circumstances expresses political opinions.”

The interesting thing is that the claim that the market is betting on Tisza's victory is actually true. In places where bets can be placed on this, most people are indeed betting that Péter Magyar will be the country's next prime minister.

One such platform is Polymarket. It is a cryptocurrency-based predictive market platform where users can buy and sell "shares" based on their predictions of future events. These may include who will win the Oscar for Best Picture, whether there will be a ceasefire in Ukraine this year, or who will be the next Hungarian prime minister.

Polymarket promotes itself by saying that, according to surveys, prediction markets are often more accurate than experts and opinion polls.

On the platform, trading is conducted in USDC, a cryptocurrency linked to the US dollar. Each "share" is priced between 0 and 1 USDC. If the outcome of an event matches the stock, its owner receives 1 USDC; if not, they lose their money. The system differs from a traditional betting office in that users are not dealing with a bookmaker, but with each other, and can also buy shares from each other.

The betting on the next Hungarian prime minister has been open since the end of July, and with the exception of the first few days, Péter Magyar has been the most likely winner throughout.

Currently, based on the listing of shares, the site predicts a 56 percent chance that the Tisza Party will form a government and a 43 percent chance that Fidesz will. In addition to betting on Péter Magyar and Viktor Orbán, there are also shares available for László Toroczkai (far right Jobbik) and Klára Dobrev (DK) but their value is only slightly above zero.

Considering that we are talking about an election in a small country, due to take place next year, there has been a relatively large amount of money involved: according to the platform, there are shares worth $1.3 million in circulation.

Among them, there is a user who owns 121,000 Péter Magyar shares, but there are also those who have bought nearly as many Klára Dobrev shares at a low price.