Cyprus Government Urged To Close Stock Exchange To Gain Investor Confidence

by Lorys Charalambous, Tax-News.com, Cyprus

26 September 2001

During a press briefing this week, ex-Parliamentary speaker and Finance Committee chairman, Alexis Galanos, called for the government to close the beleaguered stock exchange and draw up an emergency action plan to deal with the consequences of the US terrorist attacks on the global economy. The situation is particularly grave for the Cypriot stock market given its recent history of losses and tremendous lack of investor confidence.

'The war will be long in all areas of the economy, such as tourism, and consumption will be affected, which in turn will influence the economy's growth rates ... My suggestion is that the CSE should shut down for a short period of time to stop share prices from plummeting further, while in the meantime the government should draw up an action plan so the public can regain trust and confidence,' Galanos said.

The CSE index has fallen to new record lows standing at 104.2 points this week compared with 800 plus at the end of 1999.

Galanos recommended that the emergency action plan include a stabilisation fund and a moratorium on the listing of new companies, as well as lower interest rates. 'The CSE should be closed for one or two weeks until a plan is drafted and international developments fall into place and give us a better view of the future,' he suggested.

He added: 'EU governments are dealing with the problem by helping airlines, insurance companies, etc. We should not give out the image that we belong to planet Cyprus and are indifferent to developments, which have not touched us yet but will eventually. The 21st century effectively started on September 11, things will never be the same again. People have changed and let's not be deluded that we are isolated, especially when we are in the Middle East area.'

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