CSE turns to Dow Jones after FTSE rebuff

The Cyprus Stock Exchange has turned to Dow Jones Co. for inclusion in the DJ Emerging Markets index after FTSE International decided to exclude Cyprus from its emerging markets index.

CSE officials told the Financial Mirror that they have reestablished contact with Dow Jones as well as other European stock exchanges, such as Spain and Italy, which are not cooperating with FTSE, in an effort to place Cyprus on a major global index.

Although the Cyprus Stock Exchange has met 8 of the required market criteria as demanded by FTSE, it has not failed to meet others. According to an analysis made by Egnatia Financial Services, the CSE has failed to meet the FTSE market criteria on Corporate Governance Standards relevant to market status and requirements of international investors or selective incidence of foreign ownership restrictions. Other constraints hampering the entry of the CSE is the fact that stock lending is not permitted, its settlement free delivery is not yet available, short selling is not permitted and there is no derivatives market in operation.

Furthermore, the market capitalization of the CSE as at 31 December 2003 was the lowest of all countries belonging to the non-classified category at USD 5.8 bln followed by Venezuela at USD 6.8 bln. The market capitalisation is particularly low when compared to the lowest market capitalisation of countries classified under the “secondary emerging market” classification.

Specifically, the lowest market capitalisation among countries in the “secondary emerging market” category is exhibited by Morocco at USD 13.1 bln.