Cyprus stocks to maintain gains, Sharelink report

The CSE Main Market Index closed the week at 5080.68, 2.9% lower than the previous week’s close of 5234.02. The average daily trading volumes amounted to €22.4m compared with €24.0m the previous week. For the y-t-d the Main Index is up 27.5%.

In its weekly market roundup, Sharelink Securities & Financial Servicves Research said the anticipated strong corporate earnings growth in 2007 for the CSE Main Market constituents, in conjunction with the overall improvement in fundamentals, should provide positive impulses for the valuation of the local market.

Valuations for the majority of the local large-cap stocks run at sustainable levels, while they are relatively undemanding for the majority of the smaller-cap stocks. For the short-term Sharelink Reseach expect a consolidation movement in the market, while for the medium-term Sharelink believe that the outlook of the local market is still positive due to improving fundamentals and relatively favorable valuations as compared with other asset classes.

“We also expect the volatility in the local market to remain relatively high mainly due to uncertainties affecting equity markets internationally. Furthermore, the volatility on the local heavy-weight banking sector stocks is expected to contribute to the volatility of the local market. The M&A activity is also expected to build a support and provide further positive impulses for the valuation of the Cyprus equity market,” note Sharelink.