By Hamza Hendawi
THE ISLAND’S two largest banks marked their return to the Cyprus Stock Exchange yesterday with sharp gains, helping the all-share index shrug off last week’s slumber and chalk up a new all-time high.
The new record of 849.30 points was achieved in the absence of 21 companies, which had either been suspended by the exchange or had voluntarily withdrawn from the market in order to update their share registers and catch up on issuing share deeds.
Yesterday’s close was up nearly 40 points, or 4.89 per cent. Volume, however, was £33.53 million, not a bad showing considering that 21 companies, including some heavyweights, were out. These include Hellenic Bank, Louise Cruise Lines, Woolworth, CTC, Cassoulides & Sons, KEO, Cyprus Airways, Salamis Tours Holdings, Libra Holidays Group and Orphanides Supermarkets.
The Bank of Cyprus and the Popular Bank were traded yesterday after a two-week suspension. Their comeback was something of a sensation since the two combine for more than 60 per cent of the market’s capitalisation.
The Bank of Cyprus rose by 97 cents to close at £12.59 on a volume of £13.46 million, or 41 per cent of the day’s entire trade. Popular Bank fared even better, notching up £1.40 to close at £16.63 on a volume of £5.32 million.
The much smaller Universal Bank, however, fell by 54.50 cents to close at £9.28 but that did not stop the sector’s sub-index from rising by 8.23 per cent, the biggest gain by any of the market’s seven sectors.
The suspension of so many companies has given rise to fears among investors and brokers that the market is being greatly distorted. Some brokers said yesterday the exchange had paid no heed to advice that the market, in order to minimise distortions, must not be without more than 30 per cent of its capitalisation at any given time.
“The market is tremendously distorted now,” said Stavros Agrotis of CISCO, the Bank of Cyprus’ brokerage. “They (the exchange board) never listen and have not listened for years.”
Since July, the market has been the subject in a catalogue of errors and mishaps. These include three closures to allow brokerages to tackle a backlog of unprocessed transactions. The last of the three shutdowns lasted for four weeks. Since the boom months of the summer, the exchange has also been bogged down in technical glitches, hit by a one-day strike by brokers, disrupted by a bomb scare, and seen the frequent suspension of brokerages for failing to meet deadlines on paperwork.
The last such suspension was yesterday, when investment powerhouse Athienitis and Severis was barred from trading for a “perceived irregularity” that brokers said had arisen from a clerical error.
Ironically, the suspension followed the company’s IPO last week, which was an unqualified success. The 200,000 shares offered at a nominal value of 50 cents but sold at £2 apiece were oversubscribed several hundred times. Investors were given shares on pro rata basis and the title is expected to make its market debut in mid-December.
