By Hamza Hendawi
PERSISTENT rumours of a major takeover in the insurance sector have given the Cyprus stock market a good start to the month, with the all-share index rising yesterday by 0.52 per cent to close at 89.67 points.
The Shacolas Group said last Thursday that it had been approached by parties interested in its Paneuropean Insurance. It did not name the parties and there has been no further word from the conglomerate since.
But the share value of Paneuropean, Interamerican and Philiki – the two insurance firms for which Paneuropean is the holding company – continued to rise yesterday on the back of the rumours.
Paneuropean rose by nine cents to close at £1.09, while Interamerican and Philiki rose by 4 and 5.5 cents respectively. Both closed at £0.98 apiece.
“It was same old story,” said Yiannos Andronikou of yesterday’s trade. “The same rumours and the same results.”
According to the rumours, those interested in Paneuropean include Alpha Bank limited, which began operations in Cyprus on October 1 after taking a majority stake in the now-defunct Lombard NatWest Bank, the National Bank of Greece and the former Greek owners of Interamerican Insurance.
A takeover of Paneuropean means that large chunks of shares in Philiki and Interamerican will change hands. The company’s market capitalisation stood at £22.80 million at end of September. Paneuropean is one of only two insurance companies in the market’s top 10 companies in terms of capitalisation. The other one is Universal Life, the bourse’s fifth largest company in terms of capitalisation.
The intense activity in shares of the fiercely competitive insurance sector produced a volume of £590,150, nearly 25 per cent of yesterday’s entire volume, and pushed up the industry’s sub-index by 3.47 per cent to close at 64.69.
In the leading banks sector, Bank of Cyprus consolidated its position ahead of the Cyprus Popular Bank when its shares closed yesterday at £3.79, four cents above those of its rival. Activity in the blue-chip sector accounted for more than 40 per cent of trade with a volume of £767,091.
A promise of a freebie made by Bank of Cyprus Chairman Solon Triantafyllides to shareholders last month has dramatically increased demand on the share, although there will be no announcement on details of the bonus before January.
The freebie will mark the centenary of the bank and, in the words of Triantafyllides, is meant to reward the faith and support of shareholders.
