What next for the Cyprus bell­wether stock?

Financial Mirror (Cyprus) - - FRONT PAGE -

Heavy sell­ing by disgruntled share­hold­ers saw Bank of Cyprus shed a quar­ter of its value on the first day it re­turned to the Cyprus and Athens stock ex­changes on Tues­day.

But some an­a­lysts are con­fi­dent that the first day of re-list­ing of the one-time bell­wether stock after an ab­sence of 21 months, is pri­mar­ily sen­ti­ment-driven and some in­vestors sim­ply wanted to cash-in on their hold­ings, fear­ing fur­ther falls or to pay down cur­rent debts.

From an open­ing of 24c at 10.30am, the price that shares were of­fered to in­sti­tu­tional in­vestors in Au­gust, the stock re­mained un­der sell­ing pres­sure and grad­u­ally re­treated to 18c where it stopped by 2.30pm, by which time more than EUR 1 mln worth of shares had been trans­acted.

From there, the BOCY stock flat­lined un­til the end of trad­ing at 5.30pm, briefly dip­ping to 17c along the way.

With trade vol­ume on the CSE reach­ing a to­tal of EUR 2 mln on the day, nearly 90% of that or EUR 1.782 mln was Bank of Cyprus alone, amounts not seen in more than two years.

In Athens, it closed at 17.7c with EUR 2 mln worth of shares traded.

Bro­kers were ini­tially say­ing that if the stock would hold at 20c, then that would be a good omen for the next few days. But that was at noon, when it was still hov­er­ing be­tween 20 and 21c, be­fore it sank to 18c.

In ef­fect, of the 8.9 bln shares re-listed on the Cyprus and Athens bourses, only 8.6 mln or 0.003% were traded on the CSE and 10.3 mln on the ASE. This sug­gested that share­hold­ers who ac­quired the eq­uity after 47.5% of their de­posits were con­fis­cated to bail-in the bank last year, were prob­a­bly wait­ing to see where the stock is headed.

The 8,904,425,940 new or­di­nary shares in­cluded the 3,873,269,066 is­sued to bailedin de­pos­i­tors, 5,781,443 is­sued to ju­nior bond own­ers who also saw their hold­ings con­verted to eq­uity, 4,166,666,667 is­sued to strate­gic in­vestors who sub­scribed to the EUR 1 bln cap­i­tal in­crease and 858,708,764 is­sued to ‘Legacy Laiki’, the de­funct Cyprus Popular Bank un­der state ad­min­is­tra­tion.

In any case, 25% of the bank’s mar­ket cap has been wiped out in a day, re­duc­ing it from EUR 2.14 bln to EUR 1.6 bln.

Some an­a­lysts said it was “pre­ma­ture for any con­clu­sion” based on the share’s trade value alone. That is true, as the stock stayed clear of the CSE’s 30% limit-down price band mech­a­nism that will not be ef­fected un­til after three days of trad­ing.

Also, the CSE will not in­clude BOCY in the weight­ing of its All Share In­dex for ten con­sec­u­tive trad­ing days, which means that the bank’s shares have un­til about Jan­uary 7 to sta­bilise and pos­si­bly move up, so as not to drag the In­dex down with it.

Mar­ket sen­ti­ment also af­fected the rest of trad­ing on the CSE, with Hel­lenic Bank (HB) los­ing 9% and clos­ing at 4.2c. The CSE All Share lost 6.8% and closed at 86.78 points, while the CySE-FTSE20 lost 3.6% to end at 49.71 points.

Logi­com

(LOG)

also

fol­lowed

the down­ward trend and lost 6.8% to close at 55c, while Petrolina Hold­ings (PHL) dropped 0.9% to close at 109c. Of the shares traded, four rose, 12 fell and three were left un­changed.

Mean­while, the ASE was also un­der pres­sure, but not be­cause of the BOCY re-list­ing.

The Athens bourse is brac­ing for the first round of a par­lia­men­tary vote on Wed­nes­day to elect a new Pres­i­dent of the Repub­lic, a widely cer­e­mo­nial post. But if one is not cho­sen by the 300 MPs by the end of the month, An­to­nis Sa­ma­ras’ frag­ile New Democ­racy-Pa­sok coali­tion could col­lapse and the coun­try could be headed to­wards new na­tional elec­tions, some­thing mar­kets are loathe to.

The ASE saw mar­ginal losses, propped up to­wards the clos­ing bell by gains seen on Na­tional Bank of Greece. Greek bond yields are presently at 9%.

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