By Jean Christou
THE Cyprus Stock Exchange (CSE) yesterday announced it would close its doors for three weeks in order for brokers to clear a huge backlog of transactions.The decison was taken after a five-hour meeting between brokers, investors, public companies, and the CSE board.Finance Minister Takis Clerides, who is abroad, gave the green light for the closure.Speaking after the meeting, CSE Chairman Dinos Papadopoulos said the decision was “unfortunate but necessary” in order for brokers to clear thousands of transactions. Unconfirmed reports put the figure at 63,000.Socrates Solomides, Director of the Cyprus Investment and Securities Corporation (CISCO), the investment arm of market leader Bank of Cyprus (BoC), said the backlog of titles and transactions was creating serious problems for the CSE.”This is not the best solution but something had to be done,” he said.Soured relations between the CSE and brokers came to a head two weeks ago when three brokerage firms were suspended for failure to meet their deadlines on clearing transactions and their colleagues staged and impromptu strike.Brokers blame the automated trading system installed last May for the backlog. The move saw the average number of transactions soar from around 500 per day to nearly 5,000.Since the strike, discussions have been taking place to find a solution to the huge surge of interest by Cypriot investors.”Brokers were the first to realise the mess created by the backlog,” Solomides said.He said suggestions to operate on a four-day week and to set a five-day limit on the sale of shares by investors, have now been superseded by yesterday’s decision to shut down for 15 working days.”Hopefully this will not just be a case of shutting down for three weeks and then starting again with the same problems inside of a month,” Solomides said.He said an agreement had been reached on a number of measures which will be put in place once the market reopens. These include brokers either receiving all documentation beforehand or having Power of Attorney, and having “the money up front”.”There are a few other technical measures expected to be worked out over the next few weeks,” Solomides said.He said he did not believe the market would be badly affected by the temporary closure because it had shut for a week recently.”On the contrary, it bounced straight back and was not affected in the long run,” he said.Bank of Cyprus, which made a phenomenal return to the market on Monday after a three week break following a share split, had already said it would not be trading on Monday after bank union Etyk ordered an overtime ban.”But this is not directly connected to yesterday’s decision,” Solomides said.He said the BoC share registry also has a huge backlog and cannot function without overtime. “They decided to withdraw from the market until this problem is solved,” he said.BoC shares closed at 8.96 pounds yesterday, 8.5 cents up, trading on a volume of 20.8 millon pounds.Popular Bank shares rose 69.5 cents to close at 11.64 pounds and Hellenic Bank closed at 15.42 pounds up 42 cents.The all-share index closed 2.72 per cent up yesterday ending a week of extremes. On Monday it recorded an unprecedented 26.72 per cent while on Thursday it capped three successive days of small losses with a plunge of 9.59 per cent.Yesterday the market closed at 420.29, trading on a volume of 54.2 million pounds less than half of Monday’s 117.48 million pound trading record.
