…BOC takes the lead again
The Cyprus Stock Exchange GENX hit a fresh record high for the year on the back of a spectacular rally in banking shares on Tuesday, led by Bank of Cyprus, which after its inclusion in the Greek Footsie 20 has taken the lead again in setting direction for the overall market.
The CSE Main/Parallel index ended Tuesday at 3112.03, a fresh new record for the year and for the index, which was launched on September 6, 2004 at the base price of 1000. The Tuesday gain of 1.97% brought the overall gains of the CSE index to 80.23% since the start of the year.
The spectacular gains were recorded on the back of a sharp jump in daily volume, which roared to a record CYP 11.5 mln, heralding that the rally is broadly based and has depth, at least on the banking and other Main Market titles.
Record highs
Bank of Cyprus Pcl (BOC) was the leader of the rally on the CSE on Tuesday, gaining 2.38% on the day to CYP 4.74, just two notches below its all time high of CYP 4.76 on CYP 6.3 mln volume.
The Tuesday gains brought the year-to-date gains at 80.23%.
BOC shares in Greece meanwhile, raced 2.2% higher on Tuesday to EUR 8.40 or CYP 4.83, at their previous all-time high, far outstripping the daily gain of the ATHEX General index, up 0.6% at 4002 and the ATHEX/FTSE 20, up 0.72% at 2185.
Laiki Bank Pcl (CPB) closed at a fresh six year high of CYP 3.25, on the back of euphoria that the forthcoming EGM of the Bank to be held on October 24 will ratify the proposed three-way merger with Marfin FG and Egnatia, paving the way for the creation of a new mega-bank. CPB shares gained 1.5% on Tuesday to CYP 3.25 on daily volume of CYP 1.5 mln, bringing their year-to-date gains to 77.6%.
Hellenic Bank Pcl (HB), which is the subject of intense speculation that it will become a takeover target by a Greek bank continued to defy the laws of gravity and gained another 1.3% to a fresh six-year high of CYP 1.59 on CYP 761.000 volume. HB has rallied 179% since the beginning of the year.
Demetra Investments Pcl (DEM) gained another 3.45% to 51 cent on CYP 300k volume, taking its year-to-date gains to 134%, while SFS Group Pcl (SFS) was the fifth most active on Tuesday, up 2% at 11c, with the year-to-date gains at 64%.
Too many delays
The Main Market component stocks have been the biggest beneficiary of the rally on the back of expectations that they will be among the first wave of companies that may be considered by Greek investors, if and when the common trading platform comes into force.
Following yet another delay – the launch date was supposed to be October 9 and was again missed – the CSE has called a press conference on October 11 to once again talk about the common trading platform.
The latest information is that the platform will be launched by the end of the month.
Nevertheless, the euphoria and the anticipation that “Cypriot investors will dump their over-priced shares on Greek investors” has helped the Main Market index up 84% since the start of the year.
There is a good possibility that once the common trading platform is actually launched, many penny stocks now gaining sharply will come under heavy selling pressure on the trusted theory of “buy the rumour, sell the fact.”
The Parallel Market index is up only 31% while the Alternative Market index has gained 40% since the start of the year. The Investments Market sector is meanwhile up a healthy 87%, as many investment titles, usually loaded with banking shares have rallied on the expectation the big gap between their rising Net Asset Values and their traded prices, usually trading at a discount of 20-50% will eventually close.
