By Hamza Hendawi
EMBOLDENED by growing signs of further postponement of the deployment of the S-300 missiles and a tourism season which appears heading for a record year, share prices yesterday romped ahead in the largest one-day increase for more than five months.
Yesterday’s 1.55 per cent rise in the official all-share index was the second successive leap by more than 1 per cent – it rose on Monday by 1.12 per cent – and the biggest since March 17 when the index shot up 1.77 per cent.
So far this holiday month, traditionally one of snore trading by understaffed brokerages, the index has risen by a decent 5.15 per cent, of which 4.45 per cent has been recorded since August 17.
“Many stocks are undervalued and have been so for sometime,” said Panicos Kaiserlides of Benchmark Securities Ltd, in the way of explaining the bourse’s unusual August rally. “The market seems to have reacted well to the fact that the tourism season is on course and has not been hit by the S- 300 propaganda,” he told the Cyprus Mail.
The mood in the island’s infant market has often reflected the highs and lows of the crisis over the anti-aircraft, Russian-made missiles since the deal to buy them was announced by the government in January 1997. Turkey has repeatedly threatened to stop their deployment, by military means if necessary.
President Glafcos Clerides’s government insists that the missiles will be deployed despite Ankara’s threats and the displeasure of the United States and Britain. The government is, however, widely expected to back down if a way out is found amid persistent reports that Greece has no wish to be cornered into a military confrontation with arch-rival Turkey.
“We are very keen to see an efficient air-defence system in our possession, but we cannot sacrifice the achievements we have made all these years,” said Neophytos Neophytou of AAA United Stockbrokers, referring to a possible outbreak of hostilities on the island.
“The market thinks that the political situation is better now than it was a few weeks ago,” said Neophytou. “It is acting on the assumption that the missiles (delivery) will be further postponed. In a way, we are sending a signal to our politicians about the missiles.”
Volume yesterday was £1.34 million and all seven sub-indices rose.
Leading the pack were shares of trading companies, whose index rose by 4.39 per cent, followed by manufacturing companies with 2.44 per cent.
The Bank of Cyprus, the island’s largest financial institution, was a major beneficiary of yesterday’s rally, its shares rising by six cents to close at £3.78 apiece – only six cents below that of its main rival Cyprus Popular bank, which closed at £3.84. Hellenic bank was another blue-chip to fare well in yesterday’s trade, raking in 6.5 cents to close at £2.87.
The biggest price hike, however, was by The Cyprus Tourism Development company, which owns the Hilton hotel in Nicosia. It rose by 20 cents to close at £5.65. Unconfirmed press reports have in recent days spoken of government plans to sell its entire 81 per cent stake at the troubled hotel.
A Cabinet decision on the sell-off could be made early next month, according to the reports.
