By Hamza Hendawi
TRADERS and investors fondly call it crazy, members of the non-investing public dismiss it as a balloon destined for sudden deflation, a gambling joint or a pyramid-like investment scheme that will collapse.
But punters and doubters had better start looking for more original ways of describing the Cyprus Stock Exchange after its latest exploits yesterday.
With more than half the market’s capitalisation unavailable through suspension, share prices yesterday soared to an all-time high on a volume of £48.50 million, the fourth-largest since the market reopened on October 4 following a month-long closure.
Only one title ended lower yesterday, Agros Developments Proodos, while a total of five rose by more than £2 (£2.74 in the case of Apollo Investment Fund warrants) and no less than 25 climbed by £1 or more.
Even sleepers such as Cyprus Forest Industries (up 49 cents) and Cyprus Pipes Industries (up 54 cents) had a field day, as investors, with too much money chasing too few shares at the best of times, made the widely anticipated shift from the blue-chips of the banks to small caps.
“I don’t like the way the market is going,” said Stavros Agrotis, a senior broker with CISCO, the Bank of Cyprus’ investment and brokerage arm. “The market is dominated by inexperienced investors who are still pouring money into shares and are convinced that the only way is up.”
It is this seemingly endless supply of funds pouring onto the market that is largely held responsible for the rapid appreciation of shares.
The all-share index yesterday rose by 50.56 points, or 6.5 per cent, to smash through the 800-point barrier and close at 827.90. The figure now represents 813.49 per cent gains on the year and nearly a 100 per cent since October 4.
If the present momentum is maintained through the year’s six remaining weeks, gains of about 1,000 per cent are a realistic prospect.
“But I think the party may end before that,” Agrotis predicted.
Another broker, however, seemed to think differently. “Greed is playing a part here,” said Neofytos Neofytou of AAA United. “No one is cashing in and everyone seems to think that more profit can be made.”
“It is absolutely crazy.”
In yesterday’s trade, the sub-index of industrials rose by a breathtaking 20.73 per cent, the largest gain by any of the market’s seven sectors. The smallest gain — a miserly 0.13 per cent on a volume of £267,912 — was chalked by the banks, a sector of blue chips now left with only the small Universal Bank. The sector’s heavyweights — Bank of Cyprus, Popular Bank and Hellenic Bank — are out through suspension designed to give them time to update their share registers and rectify a spate of erroneous share deeds issued in the confusion of the boom months of the summer.
Also out for the same reason are Cassoulides & Sons, Frindlays Properties and Investments, Cy-Venture and Orphanides Supermarkets. The four, together with the three banks, have a combined market capitalisation of about £7 billion.
The sub-index of tourism companies also rose substantially, 15.84 per cent, to close at 1,092 on a volume of £17.48 million.
