(AFP, NICOSIA) – A panic-driven Cyprus Stock Exchange fell by five percent Tuesday as share prices crashed for the second session running.
Since Monday the market has slid by more than nine percent, wiping out more than 1.6 billion dollars in shares as investors sell at any price.
"The situation is out of control," trader Costas Hadjigavriel said. "There is fear on the bourse."
"We've had two mini-crashes in two days – which are not justified because there is no reason for investors, large or small, to liquidate," he said.
After today's 90-minute session the Cyprus Stock Exchange all-share index reached a year-low of 363.69 points – 20 points lower than the previous session – down 4.92 percent on a volume of $26.7 million.
On Monday the market fell 4.42 percent, on a higher volume of 34.3 million.
The market has been falling for several weeks but only now has panic truly set in, analysts say.
Small investors are demanding immediate government action and called for an emergency session of parliament to try to rectify the situation.
The panic reached the point that Central Bank governor Afxentis Afxentiou was at the centre of a bomb scare, after one disgruntled investor said a device was planted at his Nicosia home.
Police found no danger to Afxentiou, who is blamed for putting a credit squeeze on loans for shares.
The emerging market reached an all-record high last November when an extended bull run took the benchmark index to 850 points. Last year, investors made gains of more than 800 percent as the Nicosia exchange became the fastest growing market in the world.
Market capitalization has gone from a peak of $26.5 billion in November to today's 13.6 billion, a drop of nearly 50 percent in eight months.
The CSE index year-high is still a distant 699 points.
Finance Minister Takis Klerides has tried to calm nerves by announcing this year's economic indicators are on the up, as is the estimated growth rate for 2000.
© 2000 Mena Report (www.menareport.com)
