BOC rights rally on arbitrage trades

Bank of Cyprus rights (BCRI) rallied 16.78% on Friday to a fresh high of 17.4 cent amid intense arbitrage activity as major funds and investment managers sold rights in Greece and bought them back cheaply in Cyprus.

Informed sources told the Financial Mirror that Laiki brokers were very active during the last two days, selling at higher prices in Greece and then buying them back at lower prices in Cyprus, a term used as arbitrage.

The sales originating from the likes of Laiki and other Cypriot funds were more than absorbed by the likes of Citibank, Morgan and Deutsche Bank in Greece, who were all active snapping BOC rights trading on Sophocleous. By late Friday afternoon, the BOC rights in Greece were fetching 0.33 euros or CYP 18.9 cent compared to the closing price on the CSE of 17.4 cent.

The intense arbitrage activity also helped drive up total volume on the CSE to a fresh 2-year high of CYP 5.44 mln, with the BCRIs drawing CYP 1.75 mln or 10.3 mln trades while the BOC shares saw a record 1.03 mln shares changing hands for a value of CYP 2.54 mln.

BOC shares ended Friday up 5.98% at CYP 2.48, pulling Laiki Bank higher, which closed at CYP 1.71, up 1.8% on CYP 408.000 volume and Hellenic Bank closing at 54 cent for a gain of 1.9% on CYP 222.000 volume.

The CSE GENX closed 3.02% higher at 102.80 while the CSE Main/Parallel index was up 4.25% at 1600.18 points.