What next for the Cyprus bellwether stock?
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.
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%.