FTSE Med 100 Derivatives Market Planned For 2004

by Lorys Charalambous, Tax-News.com, Cyprus

24 June 2003

A derivatives market based on the recently launched FTSE Med 100 is being planned for the second half of 2004, chairman of the Athens Stock Exchange Panayiotis Alexakis told the Financial Mirror this week.

The FTSE Med 100 was officially launched on June 19 and consists of 100 stocks from the Athens, Tel Aviv and Cyprus stock exchanges (weighted 56.55%, 42.55% and 0.89% respectively). Commenting on the prospect of creating derivative markets from the base index, Alexakis told the FM: “Once interest builds up, then and only then, we will consider allowing derivatives trading on the FTSE Med 100 index, which we hope will be used for hedging purposes and not speculation.”

The ASE chairman also explained that several roadshows have been planned to promote the FTSE Med to institutional investors. From the Cypriot point of view it is hoped that the index will both raise the profile of the CSE and attract extra foreign investment into an exchange that has suffered its fair share of crises, most notably in 2001 when investor confidence plummeted along with equity prices.

Initially, five Cypriot firms make up the country's representation on the exchange, and the CSE has a guarantee that the number of Cyprus stocks will not fall below this level. The companies represented are Bank of Cyprus, Laiki Bank, Hellenic Bank, Louis Cruise Lines and Tsokkos Hotels.

The FTSE Med has been planned with future expansion in mind and it is hoped that other exchanges in the region will take part in the years ahead. According to Alexakis, open invitations have already been extended to Turkey, Egypt, Italy and Morocco, amongst others.

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