THE STOCK market continued its mysterious ascension yesterday, adding another 5.2 per cent to the all-share index, with a massive £10.3 million volume, unseen since the halcyon days of 1999.
But the Investors Association was not only unimpressed by the 23 per cent hike in a single week, it went as far as to warn investors that they were being set up for a fall.
Analysts have put the steep rise down to political developments, such as the prospect of a solution to the Cyprus problem, next month’s EU summit in Copenhagen, which is expected to give the green light to the island’s accession, and the apparently favourable results of the Turkish elections at the weekend.
However, Demetris Hadjipapas, president of the Investors’ Association, told the Cyprus Mail yesterday that political developments had nothing to do with the meteoric rise in share prices and that they were merely being cited as an excuse.
“It’s a trap,” he said. “There is no reason for this climbing up and I feel that they will trap some more people. The financial situation of the companies has not changed at all and we would like them to explain to us why they are going up. Their financial results are absolutely – excuse the word – rubbish.”
Hadjipapas said institutional investors were artificially hiking the market “because if it doesn’t go up and down they won’t have any profits”.
And despite taking advice, he said that many investors were falling into the same trap as before.
“They are not choosing companies based on financial results. They are just buying cheap stuff or whatever,” he said. “For that reason, the government and the stock exchange have to be blamed. We asked them to educate the investors and they refused to do it.”
The xak.com analyst said yesterday he too had voiced concern over the recent boom, and cautioned investors to think rationally and be choosy when positioning themselves in the market. “However, the statements of the association characterising the recent CSE gains as a `trap’ and `market games’ are very broad and may send out wrong signals,” he said.
“If the association has evidence or suspicions regarding certain actions or group of people plotting against investors, they need to come forward and inform authorities or state specific scenarios. Unless they have concrete evidence, their calls for investors to `stay away from the CSE’ might in the end hurt the same individuals they are trying to protect. Therefore, they must clarify their position and their claims. Once they do so, then investors can weigh the evidence and decide for themselves whether or not they should stay away form the CSE.”
He said that if the upward trend continued for the remainder of the year, the annual earnings of listed companies for 2002 would improve substantially. “Therefore, dramatic improvements might be at hand and the remaining two months before year’s end will be crucial.”
Yesterday all sectors recorded gains ranging from 0.4 per cent in the tourism sector to 9.4 per cent in the finance sector and 6.6 per cent for banks, mainly due to Bank of Cyprus, which shot up 13 cents to £1.64. Laiki gained seven cents to £1.34 and Hellenic two cents to 88 cents.
Eighty-six titles recorded gains compared to only 24 decliners and 46 that closed unchanged.
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.
