By Martin Hellicar
THE CHAIRMAN of the Popular Bank Group, Kikis Lazarides, yesterday warned there was a need to rein in the island’s galloping stock exchange.
The market reached unprecedented heights last month before dropping a bit towards the end of last week.
Lazarides warned that the “huge” market explosion had led to many shares becoming greatly overpriced and said there was a need for “all involved” to act to control the market.
The market is closed for the next three weeks to give brokers a chance to process the huge volume of transactions carried out as the public went share-crazy over the past few weeks.
Lazarides blamed the huge backlog of transactions on “mistakes”, but added that no fledgling market could have been expected to survive the “mad increase” in share deals experienced by the Cyprus stock exchange this year.
He said the market had a healthy future provided corrective measures were taken now.
“Long term prospects for the stock exchange are good provided that the forthcoming developments will give a new important impetus,” Lazarides said.
Various ideas for streamlining market transactions have been put forward by brokers and others, including a reduction in working hours and working days. The stock exchange board has already introduced a number of measures aimed at curbing the activities of get-rich-quick market speculators.
Lazarides said the Popular Bank group would be demonstrating its continued confidence in the market by trading shares in its investments subsidiary, Laiki Investments. He did not say when the share issue would be.
He also confirmed the bank would discuss the possibility of a new share split at a directors’ meeting on September 17, three months after an earlier split.
Lazarides was speaking at a press conference in Nicosia yesterday, called to present the group’s results for the first half of the year.
Operating profits reached £36.7 million, an increase of 52.5 per cent compared to the same period last year (when operating profit was £24 million).
Lazarides attributed the impressive results to the group’s expansion into the insurance sector, the spectacular increase in stock exchange activity and improved control of operating costs.
Shareholders can look forward to an interim dividend of 10 per cent, compared with eight per cent last year.
“Prospects for the next half of the year appear even more positive,” Lazarides stated.
A new share split seems likely further to fuel the stock market euphoria of which Popular Bank has been one of the chief motors.
When it made its debut after its first split three months ago, it opened at £3.77. By last Friday, the stock had soared to £11.31.
Sources at Popular said it was not a foregone conclusion that it would proceed with the split, a rumour on the market for several days.
They said, however, that the bank wanted to keep the share at a price accessible to all shareholders and potential investors.
