Piraeus snaps up 2% stake in Bank of Cyprus

Piraeus Bank of Greece has appeared out of the blue as one of the largest shareholders of Bank of Cyprus Group Pcl (BOC), the island’s largest financial institution, according to the BOC share register monitored by the Financial Mirror.

Piraeus is now BOC’s second largest shareholder in Greece, behind UBS subsidiary Julius Bear International, with a direct stake of 7.92 mln shares, which when added to the 903.615 shares already held by Piraeus Mutual Fund – Local, gives the Greek bank a combined “visible” stake of 8.82 mln shares, or about 2% of the BOC capital.

The swift way with which Piraeus secured its stake in BOC caught analysts by surprise, who told the Financial Mirror that most of the shares were taken from the stakes held by a number of Italian banks, including BCI, “which vanished and out of the blue, Piraeus appeared as the second largest shareholder in Bank of Cyprus.”

A number of pros described the move as being associated with the fact that from the beginning of June, BOC is included in the FTSE/XA 40 index and is a front runner to rise to the more prestigious FTSE/XA 20 index, which is tracked by most Greek mutual funds.

Other pros said the move may herald aggressive positioning by major banks ahead of fast developments likely to occur on the share capital of BOC.

— Nose-dive

However, the news that Piraeus had taken a 2% stake in BOC failed to boost sentiment on Tuesday, which saw BOC shares slide 2.63% to CYP 3.70 on the Cyprus Stock Exchange, while in Greece, BOC closed 2.35% lower at EUR 6.64 or CYP 3.82.

The ASE General Index dived 3.81% to 3394.78, its lowest level since December 2005, while the FTSE/ASE 20 was 2.9% lower at 1862.48 and the FTSE/ASE 40 was 4.32% lower at 3631.76.

The CSE General Index fell 3.21% to 2309.71 points on total volume of CYP 3.01 mln, with most investors sidelined awaiting direction to emerge from Greece.

In other stocks, Laiki shares were marked 4.3% lower to CYP 2.22, Hellenic took a 7.5% nose-dive to 87 cents, Louis was 4.9% lower at 19.3 cents and SFS was down 5.6% at 8.4 cents.