By Hamza Hendawi
SHARE prices rose by nearly two per cent yesterday in the Cyprus Stock Exchange, the market’s biggest one-day hike in months, traders said. It was more than the whole of last month’s increase.
The official Cyprus Stock Exchange Index closed at 79.90 points, up by 1.77 per cent from Friday’s close, with the banking and insurance sectors leading the upward movement with hikes of 2.16 and 1.69 per cent respectively.
The index rose by a meagre 1.36 per cent in December.
Only shares of commercial companies failed to register an increase in yesterday’s trading, loosing 0.41 per cent of their value.
Trade volume was a healthy £1.341 million, the second successive business day with volume of more than £1 million.
“There is no specific reason for the market’s performance yesterday,” said Michaelis Efrem of Nicos Efrem Shares Agency, a Nicosia-based brokerage.
“It was perhaps one of those days when the brokers were on a high,” said Efrem. “There were no company results or any statements, just a lot of buying.”
Another trader put it more bluntly: “If you’re looking for a reason for the market’s movement, then you don’t understand the Cyprus market.”
“This market does not always have a reason to move,” he said.
Bank of Cyprus led the pack in yesterday’s trade with nearly 150,000 of its shares changing hands. The share closed at £3.33, up from Friday’s close of 3.26.5.
BoC shares have traditionally been a much sought-after blue chip in the bourse. Their prestige was further enhanced after the bank’s recent announcement that it planned to issue Global Depository Receipts later this year which will be listed in London and later traded in Athens.
Shares of the Popular Bank, the island’s second biggest bank, did slightly better than the Boc in yesterday’s trade, closing at £3.34 from Friday’s close of 3.26.5, with a modest 20,556 shares changing hands.
The Popular Bank is the BoC’s main competitor at home and in Greece, whose much bigger market is proving to be a hit with Cypriot banks seeing business opportunities abroad after realising the limitations of the small Cypriot market.
Yesterday’s positive sentiment in the market followed an announcement made by President Glafcos Clerides on Saturday that the House of Representatives will soon look into three draft bills aimed at boosting the bourse.
Clerides, who is running for a second five-year term in office in next month’s presidential election, said the first of the bills would allow offshore companies for the first time to invest in listed companies without loosing any of their tax privileges.
The second bill provides for a five-year, 50 per cent cut of taxes paid by companies seeking to list in the bourse from the day their shares are traded.
The third proposed law extends tax breaks on the acquisition of newly- listed shares from two to four years.
Clerides, addressing a one-day symposium which brought together Greek and Cypriot stockbrokers and bourse officials, pledged that the three bills would become effective in March.
The Cyprus market’s capitalisation stood at £1.09 billion at the end of December. It trades in 98 securities of 46 listed companies. With the exception of banking stocks, the Central Bank allows foreigners to own up to 49 per cent of listed companies.
