Market closes higher on heavy trading.
AS RECESSION fears continued to bite into global stocks yesterday, the Cyprus Stock Exchange (CSE) general index ended in the black for the first time in over a week.
Share prices plunged during pre-trading, which resulted in the index opening at 1,250 points, some 100 points down on Friday's close.
However as the session progressed, the index climbed steadily to finally close at 1,386 points, around 3.7 per cent higher than Friday.
Of the three main banks, Marfin Laiki and Bank of Cyprus (BoC) rallied somewhat after a week of heavy losses but Hellenic Bank continued to slide. The share ended three cents down, closing at 1.20.
BoC recovered 22 cents per share to end [euro]3.72 and Laiki managed to add four cents to end at [euro]2.24. Over nine million shares changed hands.
It was not clear what cause the slight turnaround in fortune on the CSE yesterday given that global markets continue to suffer losses.
Opposition DISY's Averoff Neophytou, who was commenting on the global crisis yesterday, said that since the beginning of this year the CSE had seen 14 billion in market capitalisation disappear.
This was a loss not only to investors but to all citizens, he said.
"Tens of millions and perhaps even hundreds of million and maybe even billions have been lost from the value of pension and insurance funds," he said.
He also mentioned the slowdown in construction and tourism as added problems that needed to be urgently addressed by the government.
"None of these are a simple matter but they are painful realities," Neophytou said at parliament.
He said it was time to stop glossing over the problems with nice words and to move to action.
"If in the coming weeks the government continue its literary estimates and does not take effective measures, we may find ourselves facing the first lay offs and the nightmare of unemployment," Neophytou said.
Referring to comments by President Demetris Christofias on Sunday that there was no need to panic, Neophytou said he agreed that this would be the worst thing to do during an economic crisis.
"But on the other hand to declare that Cyprus is still holding out well, this seems to me that we are living in two different worlds and two different countries," he said.
Christofias said on his return from China on Monday that the government was working on alternative solutions and measures to combat a possible fallout from the global crisis.
He said that although it might sounds strange, Cyprus had yet to feel the repercussions.
"We have no investment in 'toxic' products a" as they are called a" our banking system is sound, its cash flow is good and there is no fallout yet on its ability to help investment in various fields of our economy," he said.
However if the crisis continued, the real economy would be affected. He mentioned tourism and construction, both huge contributors to GDP and economic growth.
"In Cyprus there is no basis for fear or panic yet. So we will be ready with confidence to tackle possible problems, which do not exist yet, but may emerge," he said.
Copyright [c] Cyprus Mail 2008
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