SHARE prices took another tumble on the Cyprus Stock Exchange yesterday, dropping by 2.31 per cent on the back of heavy falls last week and spreading panic among investors.
Brokers blamed the continued fall – the general price index closed 10.89 units down, at 469 points – on the Central Bank imposing restrictions on loans and on continued uncertainty about the entry of the Bank of Cyprus onto the Athens bourse.
Prices began falling as soon as trading began and the slide never halted.
More than 45 points have now been knocked off the index since last Monday.
Market observers yesterday said they saw no sign of the market stabilising in the near future.
The last time the index took a nose-dive, investors gathered outside the stock exchange building to protest.
The first day of trading for the month did nothing to boost flagging investor confidence.
The volume of transactions was well down.
Some £26.5 million worth of shares changed hands, compared to £34.4 million on Friday’s last day of trading.
Brokers said many investors were rushing to sell off shares because brokerages were squeezing them to pay for shares they had bought on credit.
Broker Andreas Leonidou said the practice of selling shares on credit was bound to drive the market down once a fall began. He called for the immediate imposition of rules to force all shares to be paid for up front.
Broker Yiannos Andronikou put yesterday’s fall down to the Central Bank tightening up on lending for equity investments and, principally, to the Bank of Cyprus keeping everyone guessing about when it would join the Athens Stock Exchange.
"The Bank of Cyprus, for better or worse, is the barometer for the Cyprus Stock market…as long as this issue (of entry onto the Athens bourse) is up in the air and does not clear up, I believe the market will have a problem," Andronikou told the CyBC.
All sectors were down with the exception of that of insurance companies, which was up by 1.87 per cent.
The banking sector was down by 1.92 per cent, tough the Bank of Cyprus still managed to attract the largest volume of transactions, some 13.01 per cent of the total. Bank of Cyprus shares closed at £7.20, down 17 cents. Laiki shares hit a new year low of £11.25, down 17 cents.
The investments sector was down by 3.45 per cent, the industrial sector down by 2.78 per cent, the tourism sector down by only 0.40 per cent, the commerce sector down by 1.99 per cent and the general sector down by 3.75 per cent.
