THE BULLS were back on the Cyprus bourse yesterday as blue chip buying shored prices by 3.2 per cent but there were tense undercurrents among brokers over legislation bypassing them in equity dealings.
Spurred mainly by banks, the all-share index climbed 20.49 points, or 3.28 per cent to close at 645.99 after a firm opening and intraday highs and lows moving within a band of less than 10 points.
Trades were up to 5,282 on a turnover of £26.2 million.
Companies in the “other” category led advancers with a 4.9 per cent rise, followed by investment stocks, which rose 3.4 per cent. Banks climbed 3.08 per cent while commercial, industry, and insurance stocks were unchanged.
“The market is consolidating. There is some resistance at around 600 points and I would expect the market to yo-yo around that level in the next few days,” said a leading Nicosia stockbroker. Complaints from stockbrokers at legislation allowing broker-less transactions were unlikely to dent the outlook of a euphoric mood among brokers next week, he added.
“We expect to see some announcements of board meetings to review results… investors will stop being sellers and take hold positions,” said broker Dimitris Zisimides of Laiki Investments.
Powerhouse Severis and Athienitis (SAFS) were due to meet yesterday afternoon to debate a share split, warrant issue and an increase in equity. Discounting the move, buying pushed the share price up 99 cents to £25.70 on a turnover of £22,669.
Other gainers included the Cyprus Tourism Development Company, which on Thursday announced it would issue three million new shares in a rights issue to holders.
The stock climbed £1.35 to £10.35. Sharelink, which has been a consistent market outperformer, closed at £23.29, a rise of £1.19 on a volume of 18, 596 shares.
It emerged yesterday that the CSE was investigating widespread rumours on the bourse that CLR Stockbrokers and Sharelink were putting pressure on the market with mass sell recommendations to clients.
CSE director Nondas Metaxas, who addressed letters to both companies, got denials from both. “Our associates and other members of staff have never urged investors to sell or buy titles as a matter of principle,” CLR director Costas Toumbouris said.
Similar denials were issued by Sharelink, which however pointed out that it was its legal obligation to give clients investment advice.
Brokers, in the meantime, were seething at the Tassos Papadopoulos’ legislative amendment, which allows equity transactions among investors without their mediation.
By allowing private transactions, investors could be exposed to insider trading, money laundering could go undetected and indices would be distorted, they said.
“This is taking things way back to the days of KEVE,” said a female stockbroker of the unofficial over-the-counter market that existed before the official bourse came into being in 1996. “How could the CSE indices reflect transactions off the floor?”
Stockbrokers’ chairman Christodoulos Ellinas said the issue would be raised at a meeting on Monday with Finance Minister Takis Klerides.
“Here we have transparent transactions and order. This will allow transactions which are uncontrolled and unregulated,” Ellinas told reporters on the floor.
Though the Papadopoulos bill was passed unanimously, at least one deputy expressed misgivings yesterday at the effectiveness of the law.
Bypassing brokers would leave the CSE in a rut because brokerages, by law, do the task of collectingthe levy on equity transactions passed by parliament last month. “If the broker is not involved, the CSE cannot do the job,” Disy deputy Prodromos Prodromou said.
Regallia Holdings and Investments yesterday denied market rumours that they were a takeover bid by the Commercial Bank of Greece. The denial was issued after a written request for clarifications from the Securities Commission.
Regallia said if and when there would be important announcements affecting the company it would be officially announced in accordance with Stock Exchange regulations. The share price of the company closed unchanged at £2.99 on a volume of 99,876 shares yesterday.
