More than 5% now in foreign hands
Bank of Cyprus Group shares trading on the Athens Stock Exchange (ASE) closed at a fresh record high of EUR 3.42 or CYP 1.96 on Tuesday, bucking the declining trend on Sophocleous, while data compiled by the Financial Mirror shows that more than 5% of the Bank’s share capital is now in foreign institutional hands.
BOC rallied 2.4% on the day in Greece to reach a new closing high of EUR 3.42 on 978.384 shares volume for a total of EUR 3.3 mln or CYP 1.89 mln volume, which was near triple of the total volume transacted on the CSE on Tuesday.
The BOC rally is significant since it came on the day that the ASE General index closed 0.31% lower at 3300.24, even though the Greek stock market has been rallying in recent weeks and is hovering at a fresh record high.
FOREIGN INTEREST
Data compiled by the Financial Mirror showed that foreign institutional funds now own more than 5% of the Bank’s capital, with strong interest from Europe, America and the Middle East.
In the absence of custodian services in Cyprus as well as multiple bureaucratic red-tape, the crushing majority of foreign institutional investors have preferred to buy the BOC shares through Greece, rather than the CSE.
Blakeney General Partners is by far the largest foreign investor having purchased 3.2 mln shares, followed by the Norges Bank at 2.76 mln. Other major investors include Deutsche Bank AG London, UBS, Julius Baer, Morgan Stanley, Bear Stearns, Pictet & Co. Geneva, the Abu Dhabi Investment Authority, Gartmore and others in additional to other Greek institutional investors.
Financial Mirror calculations show that about 6.5% of the capital of BOC or some 30 mln shares out of a total 467.3 mln outstanding shares are in foreign institutional hands. This figure will rise significantly if the Greek private and smaller institutional funds are included, while more additions could emerge if the limited foreign interest through the CSE is also added to the figure.
The rapid increase in foreign institutional interest in BOC is widely seen as the reason why the Bank’s shares have rallied by 26% since the start of the year, beating the CSE GENX 19% and CSE Main/Parallel index increase of 22.7% since the start of this year.
The Bank’s shares closed Tuesday at CYP 1.89, up 1.6% on the week and 0.5% on the day, with more gains seen coming following the record close in Greece. The next target on the BOC shares in Cyprus is the 1.95 level, the previous record high for 2005 ahead of the release of the first half results on August 26, where according to a Financial Mirror poll, BOC is seen increasing its net profits by 80% to CYP 29.3 mln from CYP 16.2 mln in the first half of 2004.
The forecasted increase is significantly above the 49% y/y growth in profits recorded during the first quarter of the year, when BOC reported net profits of CYP 16 mln and lifted its return on equity (ROE) from 6.9% to 11.3% and close to its target of 13% by 2007.
