Derivative products based on component stocks of the Cyprus Stock Exchange (CSE) will be ready to be introduced before the end of 2008, said CSE Chairman Georgos Koufaris.
Presenting CSE’s financial results for 2007, Koufaris told the Financial Mirror that the training of CSE members has been completed and after the passage of the relevant legislation, the CSE will launch derivative products in cooperation with the Athens Derivatives Market.
He admitted that the CSE-ASE Common trading platform resulted in a reduced volume for the CSE, noting that the CSE and ASE authorities are in consultations with a view to produce a formula that would reduce the revenues loss on the CSE.
Semi-Regulated market
Koufaris said the CSE has submitted all necessary documents to the Cyprus Securities and Exchange Commission pertaining to the operation of a new Semi-Regulated market and as soon as the CySEC gives the green light, the new market will be named and start operation.
Flanked by CSE Director General Nontas Metaxas, he added that the CSE is in talks with London’s AIM for a possible cooperation. “A technical committee has been formed to explore the various possibilities.”
He added that the CSE aspires to become a regional stock market, offering new services, such as mutual funds, derivative product index, as well as other indices such as ocean-faring ships.
Additionally, he said that efforts are being made aiming to the cooperation with the Maltese stock market as well as with the stock exchanges of other countries with a view to establish a common market.
Results
Koufaris described 2007 as ''absolutely successful,'' noting that the CSE prepares to meet the challenges presented in 2008, characterised by a global financial crisis.
Presenting CSE’s financial results for 2007, Koufaris said that the CSE's revenue increased by 50% to CYP6.4 mln compared to CYP4.3 mln in 2006. The CSE expenses remained at the same levels namely CYP3 mln.
According to Koufaris, the 2007 overall volume reached 3.9 billion euro compared to 2.6 billion in 2006, while the daily volume stood at 15.7 million euros. CSE's General Index rose, from 3.970 on January 1, 2007, to 4.820 units, while the 2007 high stood at 5.518,50 units.
Currently, the CSE General Index stands at 3.300 units, presenting a reduced daily volume of 7 million euros, a decrease attributed by Koufaris, to the global financial crisis, as well as the operation of the Common Trading Platform of CSE and Athens Stock Exchange (ASE), established in 2007.
''From the end of 2007 until today, as a result of the rising oil prices, the subprime crisis in the US, dollar’s continuous downwards course and the possible recession of the US economy, insecurity was created among the investors who became more conservative, so continuous fluctuations and liquidations were recorded in the CSE,'' Koufaris noted.
Despite the negative developments, we believe that the Cyprus Stock Exchange has a future if it becomes into a regional Stock Exchange in the Eastern Mediterranean, he added.
