SHARES started the year on the downside yesterday in a sluggish session in which selling pressure depressed the index to 699.07 points, down 2.09 per cent.
Balking a trend in most world markets, which opened strongly on the first day of trading after the New Year, the Cyprus all-share index was off 14.90 points on lower volumes of £21.1 million and just 4,277 trades.
However, it could have been worse, as most European bourses took a pounding yesterday as concerns of higher interest rates sent shares sharply lower.
Cypriot investors were not seen running for the exits, since then the volumes would have been much higher, said traders. However, the market did look numb, they said. “Ours is a local market which cannot affect, or be affected by other exchanges,” one broker said, pointing to the existence of exchange control laws, which inhibit foreign investors from quickly taking up positions in the Cyprus bourse.
The all-share index was dragged down by commercials and investment shares, where the declines were most pronounced of the seven sectors. Buoyant banking stocks, the market’s capitalisation heavyweights, which yesterday outperformed the rest of the market dropping just 1.11 per cent, prevented further losses.
Traders said the market was still recovering from the holiday lull and a four-day break. “The market may take some time to regain momentum,” a broker said.
Stocks came under pressure in the first half hour of trading, when the general index fell to an intraday low of 690.76.
One floor trader said some brokers had been issuing bearish signals on the market and that was affecting sentiment among investors.
The market would probably recover by as early as today after signs in mid- session of a turnaround when the index briefly touched an intraday high of 701 points before scaling back to 699.07, traders said.
“The exchange performed as was expected,” said stockbroker Andreas Leonidou of A.L. Pro-Choice. “The holidays affected the market but judging by buying in the second part of the session the market is heading for a rebound tomorrow or the day after,” he said.
Volatile commercial stocks, which have been seesawing and have been the target of speculators in recent weeks, were off 9.2 per cent while investment firms were 4.95 per cent lower.
Bourse newcomer Logicom, which put ten million ordinary shares and one million warrants on the market, opened at seven pounds. Its last trade was at £6.55 on a turnover of 954,482 shares.
Heavy trading was reported in the Bank of Cyprus, which fell 25 cents to £10.70, CCC Tourist, which was unchanged at 73 cents and Louis Cruise Lines, which was off 14 cents to £2.96.
Blue-chip Severis and Athienitis Financial Services (SAFS) surged 1.93 cents to £23.92 after the firm announced its board would discuss a possible share split, increase in equity and a warrant issue on January 14.
The company made its debut on the stock exchange in mid-December after its 220,000 share IPO was oversubscribed more than 600 times.
