By Hamza Hendawi
SHARE PRICES yesterday snapped out of a two-session skid that interrupted a spectacular ascent as the Cyprus Stock Exchange grudgingly announced that the market would be closed for the whole of next week.
The all-share index finished at 264.69, 1.80 per cent up on Friday, when prices fell sharply for a second consecutive day.
The dips on Friday and Thursday, however, failed to trigger the panic selling everyone seems to dread these days. This, in turn, may be taken as fresh evidence that the market has developed higher levels of resistance, at least by stocks whose price roughly reflects their real value.
Yesterday’s volume was, by the standards of last week, a modest £28.97 million and four of the market’s seven sub-indices finished the day in positive territory.
Dinos Papadopoulos, Chairman of the Cyprus Stock Exchange, said the decision to close the market next week had been a difficult one to take. As a matter of principle, he said, the exchange did not agree with closures.
The closure, decided in a meeting yesterday of the exchange’s board, is designed to allow brokerages time to clear a mounting backlog of administrative work that resulted from a dramatic increase in volume.
The market was shut on July 26 and 27 for the same purpose, but the two-day closure was not enough for brokerages and listed companies to clear the backlog.
“The two-day closure was like a hole in the water,” senior trader Stavros Agrotis of CISCO said late last week.
Papadopoulos had warned that closing the market would undermine the reputation of the Cyprus Stock Exchange, but he appears to have reluctantly agreed under pressure from brokerages and listed companies, together with the prospect of total administrative chaos wiping out investors’ confidence.
Already, local investors are complaining that they have yet to receive contracts for share purchases or share certificates several weeks after buying stocks through brokerages.
The administrative mayhem, according to some market sources, has allowed some unscrupulous investors to buy and sell stocks at a profit without any money changing hands simply because the administrative arms of some brokerages are so snowed under they are not chasing investors for money they owe.
The same sources say even market giants Popular Bank and Bank of Cyprus are so far behind on their administrative work that some investors have been waiting for months for their share certificates.
The largest slice of volume in yesterday’s trade, £12.94 million, went to bank shares, whose sub-index shot up by 2.33 per cent to close at 354.63.
The Bank of Cyprus shed nearly £1 to close at £10.33 on a volume worth £7.37 million, accounting for nearly 25 per cent of the day’s entire trade. The bank’s warrants were up 12.50 cents to close at £7.45 with nearly £3 million in trade.
Shares in both the Popular Bank and Hellenic Bank also finished in positive territory, up by 16.50 cents and 24.50 cents to close at £6.46 and £7.92 respectively.
The small Universal Savings Bank was barely changed at £3.66.
