Cyprus stocks lose EUR 1.2 bln as global stocks mixed, hurt by credit woes

European shares extended their losses Tuesday as traders warned of more volatile swings sparked by ongoing credit crunch concerns.

But Cyprus stocks bucked the declining trend and edged higher Tuesday despite shedding some  EUR 1.2 bln in market capitalisation this month alone.

U.S. stocks fell after Treasury Secretary Henry Paulson admitted global financial turmoil would take time to play out. Investors were already disappointed the Federal Reserve did not take further action and cut benchmark U.S. interest rates to shore up reeling credit markets.

Widening fallout from problems in the risky U.S. subprime mortgage sector have led to sharp declines in world stocks over the past month, prompting the Fed to inject liquidity into the banking system several times and cut the discount rate at which it lends to banks on Friday.

Tokyo, Hong Kong and most other Asian markets rallied for a second straight day Tuesday amid fears over a potential global credit crisis that could jeopardise global economic growth, dealers said. However, Frankfurt, London and Paris markets sank into the red, erasing gains won at the open.

 

— Cyprus losses

 

Cyprus stocks, meanwhile, bucked the declining European trend and edged higher, with the CSE Main Index closing 0.64% higher at 4769.68 points. The market cap of all the CSE listed shares including investments fell to EUR 20.56 bln according to Financial Mirror data, down EUR 1.2 bln from its EUR 21.77 bln peak in July.

This loss is small change compared to the USD 5.5 trillion losses seen on major global equity markets since the credit crunch saw a massive liquidation of asset values. Despite the decline in values, the market value of the CSE listed stocks is still 1.5 times the GDP size of the country.

The Cyprus Statistics Department estimates that the GDP size of Cyprus end of 2006 reached CYP 8.3 bln or EUR 14.3 bln.