CYPRUS stocks charged into record territory for the fourth consecutive trading session yesterday as an unprecedented rally triggered by bank buys saw shares rocket by 5.2 per cent.
The All-Share Index reached 124.03 points on record turnover of £16.8 million as investors and brokers scrambled to snap up banking shares, whose index surged 7.98 per cent to close at 157.24 points.
A buying frenzy centred on banks has pushed the all-share index up 36.9 per cent so far this year, recouping in six weeks all the losses the bourse had suffered since an official exchange replaced the unofficial over-the- counter market in March 1996.
“It has been hectic,” a harassed broker said as dozens of spectators squeezed into a corner of the overcrowded trading floor on the third floor of the stock exchange building in Nicosia. “The phone lines have been jammed all morning.”
Brokers have said part of the bull run has been sparked by a rare appearance of Greek investors dabbling on the Cyprus market, pushing up bank shares which are generally considered to be undervalued compared to those on the Greek market.
The Bank of Cyprus has been buoyed by prospects of a listing on the Athens Stock Exchange. It applied for the listing last year, and its application is awaiting approval of amendments to Greek laws allowing the listing of overseas firms.
“Banks here are trading one and a half, two times their book value, which is ridiculously low for the Greeks,” said stockbroker Costas Hadjigavriel.
Heated trading during yesterday’s session pushed bank stocks close to the 15 per cent volatility limit, with Bank of Cyprus hitting an intra-day high of £6.05, Popular Bank £6.02 and Hellenic Bank £3.65.
The leaps and bounds of the past ten days are in stark contrast to the not- so-distant past when the index swings would be less than one per cent daily.
But there were mixed feelings as to whether the market was spiralling out of control. “I would think this index… when it reaches 135, 140, it’ll be just about right,” said Hadjigavriel, who dismissed suggestions that the bourse was overheating.
“The increase has been tremendously sharp and beyond anything we have seen so far,” said Koullis Panayiotou of CLR Stockbrokers. “I think it will become the norm to see larger swings.”
