By Hamza Hendawi
THE BANK OF Cyprus made its eagerly-awaited comeback to the Cyprus Stock Exchange yesterday, and, what a comeback it was.Titles from the island’s largest bank set the market on fire, driving up both the all-share index and volume to levels that, 48 hours ago, no analyst could have predicted with a straight face or with any hope of keeping his job.The official all-share index soared a phenomenal 26.72 per cent, more than eight per cent higher than the record it smashed for the biggest one-day increase. Volume was a dream-like £117.48 million, nearly £50 million more than the previous all-time high registered on July 27.Yesterday’s huge volume is likely to compound the problem facing brokerages in clearing a backlog of transactions within deadlines set by the Cyprus Stock Exchange. In a gesture of goodwill, traders said, bourse officials yesterday rescinded the suspension of at least one brokerage that had failed to meet a clearing deadline so as not to miss the brisk business generated by the return of the Bank of Cyprus.Yesterday’s trade took the market’s gains on the year to a mouth-watering 426.50 per cent, a figure that should cause acute embarrassment for the doomsayers who warned of a disastrous crash when the index was up 200 per cent on the year early last month.The Cyprus Stock Exchange has sought to inject a note of caution in the frenzy and euphoria that has surrounded the market for months. In a statement released late Friday, it advised investors not to take for granted that investment in equities would necessarily yield profit.But if what the Cyprus Stock Exchange had in mind was to discourage potential investors from taking the plunge, it most certainly failed in view of yesterday’s impressive showing.”It has been a very good day,” said Yiannos Andronikou of Suphire Stockbrokers. “Tomorrow will be just as good because there is tremendous demand for shares,” he told the Cyprus Mail.The banking sector’s sub-index, to which the Bank of Cyprus returned yesterday after a three-week break to allow for a 2-for-1 split, rose by 37.64 per cent to close at 707.78, nearly 200 points above Friday’s close. Volume attracted by the banks’ shares totalled £70.93 million.The Bank of Cyprus shares, which stood at £12.80 on their last pre-split day three Fridays ago, opened trade yesterday at £13, but hovered at lower levels until they closed at £10.95 on a volume of £47.14 million. The bank’s 1999-2003 warrants also had an exceptionally good day, rising to £8.59 apiece on a volume of £11.78 million.The Popular Bank, which carried out its own 2-for- 1 split earlier in the summer, rose yesterday by £1.30 to close at £12.62 on volume of £16.55 million, while Hellenic Bank resumed its meteoric rise to close at £15.30, up 66.50 cents on Friday’s close.The interest in Popular Bank yesterday was partly fuelled by a rumour that the bank had bought six branches belonging to the Midland Bank in Athens to bolster its retail banking network in the Greek capital.Traders said many of the buy- orders that has been waiting for the Bank of Cyprus’ return could not be executed yesterday due to heavy demand, and that the carry-over orders would most likely produce volume levels close to yesterday’s for the remainder of the week.”We have been expecting volumes of £100 million every day starting September for at least three months,” said Andronikou of Suphire.In a separate development, reports circulating in the market yesterday spoke of brokers intending to raise their commission effective tomorrow. There was no immediate confirmation of the report, but the managing-director of one brokerage said his firm was indeed raising its commission to 1 per cent from 0.75 per cent on sellers and buyers. He said he could not speak for other brokerages.He said the rise was essential to cover the spiralling costs resulting from the recent increase in volume and the need to clear transactions swiftly under the threat of suspension from the stock exchange.”We’ve recruited more people, we are working over-time and over weekends to meet deadlines for clearing transactions,” said the brokerage boss, who did not want to be named.
