By Hamza Hendawi
IN AN apparent attempt to talk down the red hot market and spare ordinary folks the misery of losing hard-earned savings, the chairman of the Cyprus Stock Exchange warned investors yesterday that the value of some market shares was unjustifiably high and advised investors to exercise maximum caution.
Dinos Papadopoulos, addressing a news conference at the Nicosia Hilton, also announced a set of measures affecting trading which appeared designed to curtail the activity of speculators and reduce the backlog of transactions plaguing some brokerages and souring relations between brokers and market authorities.
“No one can protect investors from their own bad choices,” warned Papadopoulos, who also called on brokerages not to accept orders which they could not handle, thus compounding the backlog problem.
Share prices, meanwhile, dipped for the second day yesterday, further chipping away at the colossal gains made on Monday when the official index rose by 26.72 per cent.
The all-share index closed at 452.57 yesterday, 2.40 per cent down on Tuesday. Volume was £58.86 million, down from £81.14 million on Tuesday and £117.48 million on Monday.
All seven sectors of the market ended the day down, with investment companies the heaviest losers followed by manufacturing and tourism. The lucrative banking sector, which was set ablaze on Monday by the return of Bank of Cyprus titles after a three-week break, did not escape the onslaught, with the island’s largest bank shedding more of its spectacular gains of Monday.
The Bank of Cyprus was down by 43.50 cents to £9.96 on a volume of £16.48 million. The Popular Bank, the island’s second biggest was slightly up, closing at £12.11 on a volume of £11.63 million.
Hellenic Bank was again in positive territory, notching up 37.50 cents to close at £16.47 in the run-up to its 4-for-1 split scheduled for later this year. Volume was £5.02 million.
Papadopoulos, the stock market boss, said new trading regulations would oblige brokerages to key in the name of the broker executing an order, the name of the investor and his identity card number or, in the case of non- Cypriots, his passport number.
They also require that all transactions carry a copy of the Certificate of Transfer issued by the bourse, thus making it impossible for speculators to hop in and out of stocks without having to produce documentation of the pervious sell or buy transaction. Papadopoulos, however, said this measure was temporary and designed to reduce the backlog of unprocessed transactions.
It also seemed to be the exchange’s counter-proposal to the one by brokers to reduce the bourse’s week to three sessions from the current five.
A temporary cut on the leeway available to speculators could dramatically reduce volume at a time when the average number of transactions has soared to 4,000 from 500 because of the introduction in early May of an automated trading system.
Papadopoulos could not say when the new regulations would come into effect, although the Financial Mirror, the island’s English-language business weekly, said that could be as early as tomorrow.
