The stock of Bank of Cyprus, the island’s largest lender, opened at €0.148 and fell as low as €0.144 intraday, before it recovered at €0.148, compared to a closing price of €0.16 the day before, according to the Cyprus Stock Exchange’s website.
Hellenic Bank shares opened at €0.86, compared to yesterday’s closing price of €0.925, and fell intraday as low as €0.833, or 11%, according to the CSE.
The decision for a Brexit also affected the non-financial sector with Vassiliko Cement Works falling 3.7%, to €2.11, and software developer Logicom falling 4.7%, to €0.71.
The shares of Tsokkos Hotels, cruise ship and hotel operator Louis Plc, and cruise ship operator and logistics firm Salamis Tours, were not traded on Friday and remained unchanged at €0.082, €0,34 and €0.289 respectively.
The weakened sterling, which fell to a 30-year low could affect the purchasing power of tourists from the UK, Cyprus’ largest source of incoming tourism, accounting for roughly a quarter of the island’s economy, directly or indirectly.
In the meantime, the secondary yields of Cyprus’ government bonds remained unchanged on Friday, while those of other peripheral countries, including Portugal, Spain, and Italy, took an upward trend reflecting an increase in the perceived risk for investors, a banking source said.
“We haven’t seen Cypriot bonds being affected for the time,” the source said. “But we know that Cyprus, together with Ireland, are the countries expected to suffer most from a Brexit. They are more exposed to the UK economy”.
“We expect (the government’s) borrowing cost to rise,” the source added.
Irena Georgiadou, chairwoman of Hellenic Bank, said that she does not expect any direct impact on the bank or the economy.
“For the time being, it’s business as usual,” she continued. “We don’t have a big exposure to the UK”.
A Bank of Cyprus spokesperson declined to comment about the lender’s future plans when contacted by the Cyprus Business Mail.
On June 16, BoC CEO John Hourican told that he expected a neutral impact on the Cypriot economy from a Brexit. Bank of Cyprus’ UK subsidiary, accounted for 5% of the bank’s total loans in March and it is “ring-fenced, capitalised, funded, and separate to Cyprus,” Hourican said then.
While Cyprus’ economy was sufficiently diversified to cope with Brexit, Hourican said that he was expecting strong market volatility.
“I am more concerned about the conversations that occur in the Netherlands, in Spain, Italy, Greece because you begin to unravel the edifice that is the EU,” he said back then.
A Bank of Cyprus source said that there are currently no changes in its plans for a listing at the London Stock Exchange.
Source: Cyprus Mail
