Cyprus Mail

BOC London listing showing the way for more Cypriot companies, broker says

A week following the listing of Bank of Cyprus’s share on the London Stock Exchange (LSE) the balance has been positive, showing the way for more Cypriot public companies, a stock broker said.

“The messages we receive are very positive and we hope that other serious companies seeking to gain access to the global markets will follow,” said Charis Assiotis, founding partner of Mega Equity Securities and Financial Service Plc Ltd, in a telephone interview on Thursday, a week after the launch of the bank’s share on the LSE. “We see such steps, which Hellenic Bank and other companies such as Vassiliko Cement can also undertake, positively.”

The requirements, Assiotis added, for such a step to be successful include a path to profitability and a corporate governance code.

Assiotis added that while “it is still too early” for final conclusions, the increase in trading volume, seen at around €5m between January 19 and January 26 alone at the LSE, shows that “Bank of Cyprus is about to meet its targets”.

“You see there, investors seeking to buy 200,000 shares, who are not awaiting for the price to reach a limit down to step in,” he said. “They are not speculators. They are not petty investors, those who want to buy Bank of Cyprus stock worth €2.5m, but investors with true interest which turns us optimistic”.

The bank’s chief executive John Hourican said on Wednesday that the bank already had meetings with 80 institutional investors who showed interest in investing in the bank’s stock.

Bank of Cyprus, the first Cypriot corporation to have its stock traded on the LSE, saw the price of its share traded at €3.30 on Thursday 16:00 Cyprus time on the LSE, and €3.27 on the Cyprus Stock Exchange. The share of the bank’s holding company, started trading at €3.22 on its first day and closed on that day at €3.35, up 4 per cent.

Already ahead of the suspension of the trading on the CSE and the subsequent reverse split at a 20 to 1 ratio, the mere prospect of the LSE listing pushed the price up of the old share from €0.13 to €0.16, Assiotis continued.

He added that, after the expected departure of US billionaire Wilbur Ross, Bank of Cyprus’s vice-chairman, whom president Donald Trump appointed secretary of commerce, the bank will be steered in the right direction. “We have faith in the bank’s management and major shareholders,” he added. Ross led a group of US investors into Bank of Cyprus in August 2014 when it rose its capital by €1bn, less than two years after it converted deposits into equity as part of Cyprus’s bailout agreement.

The listing of Bank of Cyprus, and at a later stage of other Cypriot companies on the LSE, could also have beneficial effects on the local exchange, he said. While higher prices in London would result in attracting potential sellers, lower prices at the exchange in Nicosia could attract investors from abroad.

Assiotis added that a possible privatisation of the CSE could further strengthen its role and allow it to become part of a network of exchanges and attract further companies and add additional products.

Stavros Evagorou, a lawmaker of Akel, which traditionally opposes privatisations, said on Monday that his party is ready to discuss a possible privatisation of the CSE.

“Investors at the CSE have limited options,” Assiotis said. “But we hope to see one day the stock of the Cooperative Central Bank or even that of Cyta”.

Assiotis disclosed that he is owner of 10,000 Bank of Cyprus shares.

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