By Hamza Hendawi
THE CYPRUS Stock Exchange was quick to put Monday’s sorry events behind its back, returning to normal yesterday with prices rising by 2.78 per cent and volume at a decent £38.76 million.
All seven sub-indices finished up except for that of the “other companies” sector. The all-share index closed at 358.35, the seventh consecutive record close.
An impromptu strike by brokers on Monday to protest the suspension by the bourse’s authorities of three brokerages for failing to clear a backlog of overdue transactions brought chaos onto the market and left investors fuming and volume at £2.11 million, the lowest since the start of the year.
Under an interim deal mediated by Finance Minister Takis Klerides in a series of emergency talks on Monday, brokers agreed to return to work yesterday. Their return was conditional on the Cyprus Stock Exchange authorities changing policies which they hold responsible for what they see as an atmosphere of threats in the bourse.
Monday’s stoppage has further hurt the image of a market whose reputation suffered from a week-long closure earlier this month and a shorter stoppage late last month to allow brokerages and listed companies to clear a backlog of backroom administrative work.
The backlog has resulted from a sharp increase in the number of transactions — from a daily average of 500 to 4,000 — following the introduction of a fully automated trading system in early May to replace the open-cry system.
The stock exchange has been telling brokerages for some time now to hire more backroom staff, but the brokerages counter that a central depository system expected to be operational next year will mean that those hired now will be made surplus then. The brokers, according to informed sources, are suggesting that the market hold three sessions, rather than five, a week.
In yesterday’s trade, Popular Bank rose by 88.50 cents to close at £8.84 with a volume of £8.16 million, or 20.8 per cent of the entire day’s trade.
Hellenic Bank, a share that has appreciated some 300 per cent so far this year and is scheduled for a four-for-one split next month, notched up £1.62 to close at £11.90.
The Bank of Cyprus, the market’s supremo and engine, remained conspicuous by its absence. The bank’s titles are not due back on the bourse before August 30 after its two-week break to allow for a two-for-one split was extended by another week.
Louis Cruise Lines’ shares, which had been widely tipped to hover around £3.50 by now, rose by a meagre 6.5 cents to close at £2.42 with a volume of £2.01 million. The share was embroiled in controversy the day after it made its market debut when it was revealed that two of the company’s top executives, including its managing-director, sold tens of thousands of shares and warrants on the first day of trade. Later revelations that the company gave a substantial number of shares to political parties as part of its private placement further dampened investors’ enthusiasm.
