AS THE all-share index recovered slightly yesterday, brokers, investors, politicians and businessmen all came out of the closet to analyse the market’s woes.
On Monday night, Finance Minister Takis Klerides held an emergency meeting with the stockbrokers’ association after the index plunged almost five per cent during the day’s trading to a new low of 313.
After further meetings yesterday with brokers and investors, Klerides said he would begin a series of contacts with all parties concerned with the Cyprus Stock Exchange (CSE) to get to the root of the problem.
“The two parties reaffirmed they would support the CSE,” he said in a brief statement after the meeting.
Brokers’ Association president Christodoulos Ellinas said yesterday his members would take on their responsibility on the floor as large investors. He said the meeting with Klerides had led to some positive conclusions, which, with the support of brokers, could reverse the current downward spiral.
“I think this will turn around the negative climate we’ve been experiencing,” he said. “I think the most important thing is for the small investors to gain back their trust in the market and I think there is still time for the climate to be turned around and we all have to take measures to bring this about.”
Ellinas said investors had to look at the CSE in the long term. “We have a lot of good companies on the CSE, companies that can not only stand on their own there but also on exchanges abroad,” he said.
But the brokers’ sweet-talking appeared to be falling on the deaf ears among investors, who say they are fed up with seeing their life savings going down the drain as institutional investors play games with the market.
Investors Association president Alkis Argyrides said investors were hoping that changes to CSE regulations would help stem the market’s fall.
But government spokesman Michalis Papapetrou said the government would not interfere in the market unless there was proof of dirty dealings, in which case it “wouldn’t hesitate”
“If we stuck our necks out blindly it would be the end of the CSE,” he told his daily press briefing. “We do not want the CSE to be politicised. It needs to operate on levels within the framework of the laws of the economy and the market.”
He admitted, however, that improvements to the regulations were needed and confirmed that the House would he discussing these at tomorrow’s plenum.
“If there is proven suspicion of an illegal activity, we would not hesitate, but until now there has not been,” he said. “The government does not have a magic spell that can influence the index. The market has to be left to operate within the laws of the market.”
Renos Christodoulides, vice president of the Securities and Exchange Commission, said investors’ behaviour was inexplicable, but added he could not rule out the possibility that people might be playing games on the CSE. “Logically, there could have been some played in part, but at the same time what is happening is also the result of ill-conceived investments either early this year or late last year.”
Christodoulides` words were echoed by Employers and Industrialists Federation (OEV) chairman Michalis Zivanaris at a news conference yesterday. “We are paying for the sins of the past. Investors should be calm and not panic sell,” he said, adding that the situation was nothing new and happened on all markets around the globe.
“I could say we are paying for our irresponsible behaviour in 1999. Patience and self-restraint is required because selling in a panic will not serve any purpose.”
Zivanaris also called for an independent and in-depth study to find out what mistakes had been made and how they could be avoided in the future.
