Bourse just manages to keep its head above water

Michael Ioannou

TIGHT liquidity conditions continued to put strain on the Cyprus bourse yesterday as the benchmark index just about managed to keep afloat with a marginal 0.4

per cent spike.

The benchmark index closed 0.44 percent, or 2.5 points higher to 596.32 on a traded value of 13.1 million pounds, some four million pounds less than Wednesday.

The bourse rebounded from a softer open of 592.94 and fluctuated between a narrow band of 596.32 to 591.82.

Traders said that they had initially expected yesterday’s session to follow the three-day slide of the bourse earlier this week, but added that buyers were starting to emerge at current low levels. However, they added that poor liquidity and lack of

any corporate developments was excluding an upsurge in the immediate short-term.

"There is a general lack of demand and the market is weak," said Severis and Athienitis stockbroker Katia Constantinidou. "The climate will be reversed once the investment firms start putting money back into the market," she said.

Companies in the "other" sector outperformed the broad market and climbed two per cent. Banking and industrial stocks were kept steady, inching 0.25 and 0.1 per cent

upwards. Tourism stocks led decliners, trimming 0.9 per cent.

Analysts and dealers agree a key reason for an ongoing correction which has seen the market go into decline since last November is a general lack of liquidity. They cautioned, however, against describing the situation as a freefall, a phrase which will spark panic in the minds of any small investor.

Jumping on a 700 per cent surge in prices on the stockmarket last year, dozens of new companies have been formed and have drained millions of pounds from

the market in new issues. From November, when the market hit a peak of 881.46 points, it has retreated 32.4 per cent.

Another dealer said the market was being pressured in a bear play by influential players who wanted to mop up cheap prices. "I have seen a desperate attempt by some to create a mini-crash," said one dealer, who requested anonymity. "The market is resisting though."

Traders reported that institutionals like Demetra and CLR Investments were active on the market which helped prop it up in recent days and prevented it sinking further.

Advancing stocks outpaced decliners 42 to 35 and 11 were unchanged on 88 securities traded. The small-cap K&G Complex topped market volume with 835,000 shares changing hands, followed by Avacom Computer with

409,000. Avacom announced earlier this week a deal to acquire 30 per cent of a Greek consultant firm, giving it a foothold in the country’s market.

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.