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Bank shares battered in market carnage.

Byline: Jean Christou

ANOTHER day of carnage dominated global markets yesterday, and Cyprus was no exception, as the general index plunged 8.0 per cent, led by a continuing massacre of bank stocks.

The general index hit 1,531 points, its lowest level in 36 months, a loss of more than 66 per cent since the beginning of this year.

Trading opened around 50 points under Tuesday's close, sliding steadily downwards until the end of trading, with 33 stocks taking a hit, 11 showing gains, and 30 ending the same. Many investors were sitting tight, however, with around 50 per cent of listed companies showing no trade at all during the session.

Bank of Cyprus (BoC) was the worst hit of the three major banks, losing almost ten per cent of its value during trading. The share fell 42 cents to close at [euro]3.96. A year ago, BoC shares were worth around [euro]13.

Marfin Laiki and Hellenic Bank were also hit, but not as badly. Laiki lost 21 cents to end at [euro]2.58 while Hellenic fell seven cents to [euro]1.42. This time last year, shares in the two banks were worth [euro]11 and [euro]6 respectively.

On international markets yesterday, fears of a global recession overshadowed signs that efforts by authorities across the world to bolster the financial system were beginning to bear fruit.

"The overarching fear, overshadowing the progress made in fighting financial collapse, was about the deteriorating global economic climate," a Reuters report said.

European shares were down more than 4.1 per cent and Japan's Nikkei average ended down 6.8 per cent, while the Dow Jones 500 fell 3.3 per cent in opening trade.

A market observer in Cyprus said there was no good reason for the CSE to tumble other than investors clinging to the notion of a looming global recession.

The observer said rumours of a recession had been floating around for more than seven months without markets seeing the devastation they are witnessing today.

The US and Europe had pulled out all the stops to salvage their economies, but markets continued to fall day after day: "These are abnormal conditions and are not reflecting the companies, or the quality of the companies on the CSE," the observer said.

Copyright [c] Cyprus Mail 2008

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Publication:Cyprus Mail (Cyprus)
Date:Oct 23, 2008
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