Despite government promises of support, the CSE still feels the pressure

Mandy Robinson, Tax-news.com, London

23 October 2000

The beleaguered Cyprus Stock Exchange is once again in the news. Last week Tax-news.com reported the government's announcement of a series of measures aimed at supporting and improving the CSE's operations. But this has made no immediate difference to the stockbrokers who continue to bicker and point the finger of blame at each other.

At the end of last week, Laiki Bank shares fell by 7% as investors struggled frantically to sell more than 800,000 shares, representing 31% of the day's turnover. Leading stockbrokers lay the blame firmly at the doors of the large brokerage firms.

Theodoulos Charalambides of Axxia Plus Securities accused the larger firms of standing back and not participating by saying that the fall would never have happened if they had entered the market. He said he could not comprehend why the large investment houses, which corner a majority share of the market, did not act. The index closed at 313, a new low for the year, and more than 55% below its high in 1999.

It is possible that the hurried sell-off was sparked by a rumour that the shares of the Bank of Cyprus, due to appear on the trading floor on 23 October, are likely to open at under £6 which would force the CSE index to well below 300 points.

Adding to the tension last week was the Association of Stockbroker's decision to refuse to support stockbroker, Andreas Leonidou of AL ProChoice, who outspokenly called for the resignation of the head of the Central Bank, Afxentis Afxentiou. Leonidou complained about Afxentiou's decision to borrow more money for CSE investments and his refusal to deny the relaxing of monetary policies. The association publicly sided with the Central Bank saying that it was in full support of the bank and had every confidence in its operations.

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