SHOCKWAVES from Monday’s catastrophic blast continued to ripple through the economy yesterday, as Cyprus stock exchange (CSE) dropped a further 4.6 per cent.
The losses follow Monday’s dramatic 7.8 per cent drop in the immediate aftermath of the blast.
The CySE 20 index – which tallies the total share price of Cyprus’ top 20 firms – fell 4.45 per cent yesterday.
“This is an indication of bleak prospects for the future,” Cyprus Chamber of Commerce president Manthos Mavrommatis said of the 12.4 fall in the markets since the blast.
The banks were the hardest hit during the day’s trading, with their index falling 4.7 per cent.
Bank of Cyprus shares fell € 0.08 to €1.68 while Cyprus Airways’ share price also slumped, from €0.07 to €0.06.
However, nationwide cuts to residential, commercial and tourist areas continued to take their toll — Nicosia’s old town once again fell silent as helpless shop assistants looked on.
Even firms equipped with generators were feeling the strain. A Carlsberg factory manager in Limassol said they had managed to maintain output, but experienced electricity cuts and had no air-conditioning. On the markets, Ermes Group Plc’s share price fell 11.11 per cent to €0.16.
Mavrommatis also highlighted the impact on commerce from the shop floor.
“This will definitely have an effect on the real economy. It will not only be the perishable goods destroyed by the cuts, or the reduced production … but also the costs of reconstructing the power station.”
This, he said “will mean higher production costs” for months to come, and place a demand on the private sector to borrow with government guarantees.
“How long the high prices last depends on when the Electricity Authority of Cyprus bring the mobile units.”
Potential problems in tourism were yesterday discussed by the Cyprus Tourism Organisation (CTO) and the hoteliers.
“Despite the problems, with a collective policy of all involved, including the private sector, solutions can be found to avoid serious problems for tourists expected to visit Cyprus in the next few days,” CTO chairman Alecos Orountiotis said.
Orountiotis said there were some shortcomings that appeared on Monday had been resolved and it “is up to all of us to properly handle the general problem that might arise.”
Hoteliers said they wanted clear official assurances that power supply would be uninterrupted so that they can inform the markets.
The chairman of travel agents said they are being bombarded with telephone calls and emails seeking information.
Victor Mantovanis said there was no problem so far.
“We believe everything will go well but we need to act immediately,” Mantovanis said.
The government has pledged power to hotels will continue without interruption.
The explosion in Mari could mitigate recent and positive developments in Cyprus economy. The trade deficit for the first four months this year was €1.621 million, compared to 1.711 million in the corresponding period last year.
According to the Cyprus Statistical service’s latest monthly report Intra-Extra EU Trade Statistics, total imports from both EU and third countries in the period January to April 2011 reached €2,078 million compared with €2,059.2 million in the same period of 2010, while exports reached €456.8 million compared with €348 million last year.
The shock comes at a time when just under half of the €123.1 million total exports are locally produced. €56.5 million worth of domestically produced goods and €66.6 million worth foreign goods were exported.
