CSE gets market liquidity boost from deal with GXG

The Cyprus Stock Exchange (CSE) and GXG Markets (GXG) have struck a deal to promote dual and parallel listings on the GXG Main Quote Market and the ECM Market of the CSE, an agreement that is expected to boost liquidity for the cash-starved Cyprus bourse following the banking fallout in 2013 and the Troika bailout.

The CSE’s unregulated ECM sector has already attracted 21 equity and two fund listings in the last two years, with a total market cap of about 750 mln euros or about a quarter of the whole CSE.

Exchange Director Nondas Metaxas said that most of these listings are foreign-owned or Cyprus-based companies with overseas activities, and have preferred to list on the CSE rather than the London Stock Exchange’s AIM market as the costs are lower and the terms are more relaxed.

After the March 2013 bailout imposed on Bank of Cyprus, that used to account for about half of all trades on the CSE, the stock was reinstated in December 2014 and has since helped double daily trades from 307,000 euros last year to an average 645,000 euros to date this year. This bring the total traded to EUR 38.7 mln, far ahead of matching and even exceeding last year’s full year volume of EUR 75.4 mln.

The deal with Denmark-based GXG is expected to open up new opportunities for CSE stocks, as market players on AIM are also active on the GXG, Metaxas said.

At the same time, CSE board chairman Yiorgos Koufaris said that the Exchange is restructuring its index and will now have just two markets – Main and Alternative – with eight and 70 listings, respectively.

A further four sub-sectors will be active as of Monday: public bonds with 41 listings, private bonds with nine, collective funds with 14 and ‘special category’ where 17 stocks will remain for six months until they meet the basic regulations for free float and reporting. After that they will be struck off.

A CSE announcement said that “35 members operate actively at GXG Markets, a considerable number of which is also operating in other markets of the EU such as the London Stock Exchange (LSE), offering significant liquidity in the market. Furthermore, issuers with securities listed on the GXG Main Quote which are interested in dual listing on the Cyprus Stock Exchange, will benefit from the multiple and flexible services that CSE offers at a low cost, as well as a considerable number of local members, remote members, and international custodians.”

The CSE said that the new agreement with GXG “does not affect the close cooperation with the Athens Exchange Group (ATHEX GROUP), with an agreement in the framework of the Common Platform.”

GXG Markets (www.gxgmarkets.com) is owned by the Swedish GXG Global Exchange Group supervised by the Danish Financial Supervisory Authority and the Cyprus Stock Exchange (www.cse.com.cy) is supervised by the Cyprus Securities and Exchange Commission.