By Hamza Hendawi
A ROUND OF profit-taking after two days of sharp gains pushed prices off their highs yesterday, but only after the Cyprus Stock Exchange’s all-share index touched a record high in mid-session.
The small drop — 0.54 per cent — led many traders to take heart from the market’s apparent resilience to liquidating pressures.
“We are not looking at a crash any more,” said Koullis Panayiotou of CLR, a leading Nicosia-based brokerage. He was referring to widespread fears that prices would take a beating when the market reopened on Monday after a month-long closure.
“There is a great deal of selling but many are buying on the first sign of a drop,” Panayiotou said.
The index closed at 485.30 after it hit an all-time high of 504.18 points in mid-session. It later retreated under selling pressure. At £23.90 million, volume yesterday recorded the fourth consecutive increase, climbing from a lowly £6.86 million on Monday.
The growth in volume, while supporting the new levels achieved by a combined increase of about 17 per cent on Tuesday and Wednesday, suggests that more investors are returning to the market as brokerages steadily reduce a backlog of unprocessed deals, giving pundits their share certificates thus enabling them to trade.
“Those who had been locked out are returning to sell so they can repay debts, but the market is absorbing nicely,” said Neophytos Neophytou of AAA United Stockbrokers. “Today’s losses were expected after two days of big gains.”
While repeating a warning that it was still early days to judge the market’s direction, Neophytou said he expected the market to receive a fresh shot in the arm when the Bank of Cyprus announces specific dates for its rights issue in Greece as part of its plans to acquire a parallel listing on the much larger Athens Stock Exchange.
The Bank of Cyprus Group holds an extraordinary shareholders’ meeting next week to vote on the rights issue, expected to account for 10 per cent of the bank’s share capital. The bank is not expected to begin trading in Athens before next year.
On the shorter term, however, the Cyprus market was expected to retreat slightly in coming days as more investors, acquiring their share certificates after weeks of delay, pull out of the market.
Yesterday’s slight drop in prices affected only the blue chips of the banks and trading companies. The market’s five other sectors finished in positive territory, with investment companies the largest winner with an increase of 8.41 per cent in their sector’s sub-index.
The Bank of Cyprus, the market’s backbone, was down by 15 cents to close at £10.82, while the Popular Bank shed 44.50 cents to close at £11.60.
