Cyprus Mail: News Articles in English, 00-10-24

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From: The Cyprus Mail at <http://www.cyprus-mail.com/>

Tuesday, October 24, 2000

CONTENTS

[01] CSE should be left to find its own level

[02] De Soto meets leaders, but tensions high

[03] Market rises but BoC left behind

[04] Klerides talks up convergence prospects, but opposition unimpressed

[05] Doctors' concern at flu vaccine delivery delays

[06] Four deaths in three days on the road

[07] Boyfriend held over child's abduction

[08] Two golf courses approved for Limassol

[09] Car confiscated after Turkish Cypriot family drive over

[01] CSE should be left to find its own level

Everyone is up in arms, complaining about what has been happening to share prices this year. But, in reality, this massive correction was inevitable after the astounding distortions of 1999, during which share prices reached insane levels. To illustrate the point, a company that had been valued at £40 million by its auditors before being listed in the summer of 1999, ended up, in the space of a few months, having a market capitalisation of £900 million. Its share price has been battered relentlessly since then, but with a current capitalisation of £182 million is it not still overvalued?

In order to quell public anger, politicians have been coming up with all sorts of proposals that would, supposedly, arrest the decline of share prices, reverse the negative climate and lead to a recovery. On Thursday the legislature passed three laws aimed at achieving this. The one regulating IPOs will not make the slightest bit of difference while the second -- forcing investment firms, within a set period, to spend 80 per cent of their capital on CSE shares -- is unconstitutional as well as foolish. In a free economy, nobody has the right to tell a company when and how it should invest its funds. The third, enabling listed companies to buy up to 10 per cent of their own shares (in order to prop up the price), if not strictly regulated and policed, could be a licence for dodgy dealings and price distortions.

CSE should be left to find its own level

IF THERE is one basic economic lesson that we should have learned over the past nine months, it is that market forces cannot be controlled or influenced by government, big business or the legislature indefinitely. A time will always come when the market will find its equilibrium and most of the distortions it had been subjected to will be eliminated, as if by magic. This is exactly what we have been witnessing at the Cyprus Stock Exchange (CSE) since January -- a correction has been gradually taking place, with the all-share index on a steady downward path, heading towards its stabilisation level. Technical analyses, carried out for brokerages, had estimated this to be somewhere between 250 and 300 points.

Everyone is up in arms, complaining about what has been happening to share prices this year. But, in reality, this massive correction was inevitable after the astounding distortions of 1999, during which share prices reached insane levels. To illustrate the point, a company that had been valued at £40 million by its auditors before being listed in the summer of 1999, ended up, in the space of a few months, having a market capitalisation of £900 million. Its share price has been battered relentlessly since then, but with a current capitalisation of £182 million is it not still overvalued?

In order to quell public anger, politicians have been coming up with all sorts of proposals that would, supposedly, arrest the decline of share prices, reverse the negative climate and lead to a recovery. On Thursday the legislature passed three laws aimed at achieving this. The one regulating IPOs will not make the slightest bit of difference while the second -- forcing investment firms, within a set period, to spend 80 per cent of their capital on CSE shares -- is unconstitutional as well as foolish. In a free economy, nobody has the right to tell a company when and how it should invest its funds. The third, enabling listed companies to buy up to 10 per cent of their own shares (in order to prop up the price), if not strictly regulated and policed, could be a licence for dodgy dealings and price distortions.

War of words as military tensions rise

By Jean Christou

DEFENCE Minister Socrates Hasikos yesterday slammed press reports suggesting Cyprus had been humiliated by its failure to shoot down two Turkish warplanes flying close to the Paphos air base on Sunday.

A National Guard radar on Sunday locked on to the two Turkish F-16's, which flew over the area during a farewell ceremony for Greek Defence Minister Akis Tsohatzopoulos at the Andreas Papandreou air base marking the end of annual Cyprus-Greek military exercises Nikiforos-Toxotis.

Turkish Cypriot leader Rauf Denktash said yesterday what had happened on Sunday was an act of war.

But Simerini yesterday quoted defence sources as saying the planes should have been shot down, and that the unified Cyprus-Greece defence dogma had been dealt a serious blow by the National Guard's failure to do so.

“If the joint defence dogma had been as powerful as Cyprus says it is, the two Turkish fighters should have been hit from the moment they entered Cyprus air space,” the report said.

“The move was aimed at humiliating Cyprus' air defence system and Cyprus in general.”

Hasikos said yesterday the reports of a humiliation had been greatly exaggerated. He said it was the first time that the National Guard's radar had actually locked on to Turkish aircraft and that they had been clearly monitored.

He said the two planes were being tracked between a distance of six and 24 kilometres off the coast of Paphos. “In no way was it a humiliation,” he said. “On the contrary, we let them know that we are here and we are watching.”

Hasikos said the Turkish pilots were well aware they were being tracked within the island's defence system and said the National Guard radar was capable of tracking Turkish military aircraft from the moment they took off in Turkey, as long as they were within range.

Commenting on the Simerini report, Hasikos said: “It was not a serious approach to the situation.” He said the planes did not fly over the base but came close, within six kilometres of the island.

Denktash, however, speaking before a meeting with UN envoy Alvaro de Soto yesterday, said the Greek Cypriot side was risking a dangerous escalation of tensions.

“You can't lock your radar on Turkish planes, which means an act of war if you're not careful,” Denktash said. “This is a direct invitation to disaster.”

Denktash also condemned the use of the Paphos air base for the landing of Greek military planes and said it would have “negative ramifications” on the ongoing proximity talks.

“The Greek Cypriots giving the Greeks the base to use in this manner is not a positive development,” he said. “Don't start this race for arms and armaments and show of strength. You can't win, we can't win, Cyprus will lose.”

Tensions rose between Greece and Turkey when Turkish jets buzzed Greek planes on their way to take part in the Nikiforos exercises. As a result, Greece withdrew from separate NATO exercises in the Aegean, accusing Turkey of blocking passage of their aircraft. Mock dogfights also occurred between Greek and Turkish planes near the island.

Tuesday, October 24, 2000

[02] De Soto meets leaders, but tensions high

UN envoy Alvaro de Soto began his contacts on the island yesterday amid soaring tension over the Nikoforos military exercises, which ended on Sunday.

De Soto's visit is designed to gauge the climate for the next round of proximity talks due to begin in Geneva next week and due to run from November 1-10.

The UN envoy met early with President Glafcos Clerides and later with Turkish Cypriot leader Rauf Denktash in occupied Nicosia.

No statements were made after the meeting with Clerides, but Government Spokesman Michalis Papapetrou said De Soto was on the island “to have a closer look at things, to see party leaders and to exchange views in

view of the next round of talks".

Papapetrou said De Soto "was not particularly happy" with the

recent tension in Greco-Turkish relations. "We explained to him that the tension was due to the Turkish stance," he added.

After his meeting with Denktash, De Soto said some progress had been achieved after the four previous rounds and hoped this would continue in Geneva, where substantive issues are expected to be discussed.

But Denktash warned the talks could be affected by events at the weekend, when National Guard radar locked on to two Turkish warplanes flying in Cyprus air space off the coast of Paphos. Recent Greco-Turkish co-operation was also struck a blow during parallel NATO exercises in the eastern Aegean, from which Greece pulled out after planes travelling to Cyprus for the Nikoforos exercises were harassed by Turkish jets.

Denktash also criticised the Greek Cypriot reaction to a statement by UN Secretary-general Kofi Annan during the last round of talks in New York, which referred to the political equality of the two sides.

The Greek Cypriot side reacted angrily to the statement, equating it with indirect recognition of the breakaway regime in the north. Although the UN later clarified that Annan meant equality in the event of a comprehensive settlement within UN resolutions, the comment still rankles on the Greek Cypriot side.

Denktash said yesterday the reaction showed that the Greek Cypriot side did not want a solution or political equality and that they were not contributing to the talks in a sincere way.

The statement is still causing controversy on the Greek Cypriot side although the government said in New York it was satisfied with the explanations.

On Saturday, the House of Representatives passed a resolution on the Cyprus problem, which said that Annan's statement has fallen outside the letter and spirit of the framework of the talks and the basis of a solution.

However, the resolution was not unanimous. United Democrats deputies Androulla Vassiliou and George Christofides voted against, while Disy deputy Kate Clerides abstained.

Christofides said the resolution criticised the tactics of the Clerides government on the Cyprus problem and that the attitude of the ruling Disy party by voting in favour had been “offensive and unacceptable”.

Clerides said that although she was not entirely satisfied with Annan's statement, she did not ascribe to the content of the resolution.

“Personally I think it's not what the actual statement said but rather the fact that Annan neglected to say some things,” she said. “I'm not entirely satisfied with statement and it was not the right move at the time but interpretation given by the majority on our side is not the right one either.”

The National Council met late yesterday to discuss both de Soto's visit and the House resolution.

Tuesday, October 24, 2000

[03] Market rises but BoC left behind

THE RETURN of Bank of Cyprus (BoC) to the floor yesterday was expected to lead to an overall upward or downward movement, but few punters could have foreseen the index rising 3.11 per cent to 312 points and leaving BoC trailing behind with losses of 7.52 per cent.

“Common sense would have us thinking that since the BoC extravaganza did not go as well as expected, a domino effect would drive the rest of the shares south,” said one CSE analyst.

“Despite that, the rest of the shares moved positively and were not affected by the sell-off of our star. So, if the BoC had opened positively today, then would we have seen the rest of the gang take a dive?”

BoC suspended trading ten days ago to prepare for its listing on the Athens Stock Exchange and returned to the floor 47 cents per share poorer to close at £5.78 as the majority of stocks move upward. The stock hit a low of £5.56 early in the session.

The CSE analyst said yesterday’s performance proved unfounded the myth that the index moves on the basis of what happens to B0C and that perhaps the market was moving out of the shadow of the banking sector

Sellers dominated the market’s opening yesterday and prospects looked bleak from the outset when the index opened at 291 points, nearly three per cent down on Friday’s abysmal close, but it climbed steeply until mid session, managing to sustain its gains until trading ended. Volume stood at a healthy £23.98 million with more buyers than sellers on the floor.

Laiki bank which took a hammering last week in the absence of BoC yesterday managed to recoup some of its losses, jumping 53 cents to end At £7.72. Both banks traded on huge volumes, Laiki, the day’s most active share, accounting for £4.95 million of the total and BoC for £3 million.

“Investors expected BoC to start low and accepted this would happen but the market showed some strength in withstanding that,” one Nicosia broker told the Cyprus Mail. “It showed a certain amount of depth today on some stocks which they believe might have some prospects.”

Overall the banking sector lost 0.7 per cent and the IT sector 1.33 per cent but all other sectors were on the rise between 4.86 per cent for investment companies to 24.26 in the hotels sector.

One of the best performing sector was tourism, which gained 12.66 per cent. Here Libra added 25 cents to close at £2.01, Golden Sun 10 cents to end at 79 cents, New Marathon nine cents to finish at 61 cents, and Salamis seven cents to close at £1.19.

In the manufacturing sector, which closed 5.72 per cent up, Lanitis Bros gained four cents to end at 70 cents with 1.28 million shares changing hands.

“Looking at the depth of the market today we expect some liquidations the day after tomorrow (Wednesday),” the Nicosia broker said. “We hit rock bottom and we have to be careful and continue to buy selectively.”

The CSE announced yesterday that there would be a change in the way the index was calculated effective immediately. The prices of first-time traded shares will not be calculated in the index for five working days, beginning from the first day of commencement of trading.

Tuesday, October 24, 2000

[04] Klerides talks up convergence prospects, but opposition unimpressed

CYPRUS is expected to meet all the European Union's Maastricht criteria by 2002, Finance Minister Takis Klerides told the Finance House Committee yesterday.

He said the economy was doing relatively well this year, but was not expected to improve dramatically in 2001.

Growth is still doing remarkably well, reaching 4.5 per cent, he added.

But inflation and public deficit figures remain outside the Maastricht convergence criteria for Monetary Union, prerequisites if Cyprus wants to join the euro zone once it achieves EU membership.

But new Diko leader Tassos Papadopoulos complained to Klerides that nothing was being to cut down the Public Debt, which currently stands at 61 per cent of GDP, while the public deficit stands at 3.9 per cent of GDP.

The Maastricht Treaty rules that government deficit must not exceed 3 per cent of GDP in normal circumstances, and that the ratio of public debt to GDP must not exceed 60 per cent.

Inflation meanwhile has risen to 4.2 per cent from 1.7 per cent in 1999, well above the EU average. The government puts down the rise to high crude oil prices and the rise in farming costs due to the drought, as well as the weakness of the euro-linked pound against sterling and the dollar.

“If the public deficit is decreased, then it will reduce public debt,” Klerides said, adding he expected the public deficit to go down to 3.3 per cent of GDP in 2001.

“We are optimistic we will bring it down to two per cent by 2002 to be in line with EU averages,” he pointed out.

But according to a Finance Ministry study, the public debt is expected to rise further to 63.3 per cent next year, well above the 60 per cent Maastricht threshold.

Papadopoulos argued one reason why the public debt was so high was the uncontrolled state budget to pay civil servants' salaries and travel expenses.

“Twenty civil servants went on a trip to Brussels in the sidelines of EU accession process. I tell you most of them were not fit for the job,” the DIKO chief said

Klerides replied that in the last three years, the government had appointed only 800 civil servants.

Akel deputy Kikis Kazamias meanwhile warned that delays in carrying out development projects were costing money every day, adding to the mountain of public debt.

And DIKO's Nicos Moushiouttas chipped in: “£1 million a day is spent to pay out the public debt, which now stands at £6 billion.”

DISY parliamentary spokesman Panayiotis Demetriou suggested the setting up of an expert committee to improve the handling of economic matters. Klerides approved of the idea.

On privatisation, the Finance Minister said the government earned £35 million this year from selling part of its Hilton and Cyprus Airways shares to the private sector.

“Privatisation though is not an immediate goal for the government. In 2001, the telecommunications and energy power sectors are expected to become partly privatised and help to reduce inflation.”

Tuesday, October 24, 2000

[05] Doctors' concern at flu vaccine delivery delays

RED tape and cargo delays yesterday conspired to block 23,000 doses of flu vaccine due to arrive in Cyprus, despite doctors' warnings that elderly and high-risk patients need it as matter of urgency.

“We expected it here this morning,” Panayiota Kokkinou, acting director of the Health Ministry's Pharmaceutical Services, said yesterday. “But because British Airways left it in the fridge in London … they said we will would have it here tomorrow.”

Tasoulla Louca, acting BA cargo manager at Larnaca Airport, yesterday confirmed the vaccine had been left in London because no cargo, except luggage, went aboard BA's London-Larnaca passenger flight.

“We wanted it a bit earlier” than yesterday, Kokkinou said. “Our effort was to have the vaccine by September… and we are not very happy that it came in at this time of the year, but there were problems with the tenders that made it so late.”

Kokkinou said the Health Ministry ordered its flu vaccine through international tenders, and that this year's 23,000-dose order was based on last year's public hospital consumption.

Despite the delay, she said, BA had pledged it would be in the country by today “and we will distribute it immediately.”

Kokkinou noted that not all those in risk categories responded to the recommendation to get flu shots. But local epidemiologist Dr. Michalis Voniatis cautioned that all those over 65, and especially those “at-risk” of any age, should get the shots as soon as possible.

At-risk groups include “those with chronic respiratory problems like bronchitis, asthma and frequent chest infections, plus people with diabetes mellitus, chronic cardiac problems, coronary artery disease, chronic kidney failure,” he said.

He also urged ”those who are immuno-compromised, in particular HIV-positive persons” to get flu shots, but always with their doctor's advice.

Voniatis said the shots were crucial because “this year we have two new types of flu -- the New Caledonia strain and the Moscow strain… The possibility of an epidemic cannot be excluded because of these new strains circulating,” he said.

“And there is still the Beijing strain, which has been around for probably the last 10 years, but there is a new vaccine for this,” he added.

“But we have to… begin vaccinating in November. We should not delay any further. People should get vaccinated now,” and even that it is cutting it close, he added.

“Normally epidemics start in Cyprus in December, usually around Christmas,” he said, “but last year it started on the first of December. So we have to do as much as possible now and begin in November.”

Besides people 65 and older, medical personnel “should get the shots because they come into contact with the virus. Also people working in banks or as teachers are bound to come into contact with it. We advise them to get flu shots,” he said.

Asked if there was enough vaccine to go round, Voniatis replied: “I cannot give you a straight answer to that. I can tell you that in the private sector we have quite sufficient amounts of flu vaccine.”

Dr Andreas Demetriou of Nicosia, second-vice-president of the Cyprus Medical Association, vouched for this, declaring: “I think we will be OK” with the private sector's shot supply.

“But,” Voniatis added, “I have heard some complaints from elderly people going to public hospitals that they are not getting the vaccine.”

The problem is, Voniatis said, “the Cyprus programme of flu vaccination is not an official programme. There is no policy of the Ministry of Health. It is done on an ad-hoc basis.”

Kokkinou confirmed this, noting she would “have to think about” issuing public service adverts notifying people that flu shots were available. “It hasn't been done ever before,” she said.

Voniatis, by contrast, said Cyprus should learn from Britain, where “the official health policy is to vaccinate all people 65 and over free of charge, because last year in Britain they had 20,000 deaths from the flu epidemic in this age group.”

Since Britain's universal flu-shot programme began, “it was found that among those who were immunised, the mortality rate fell by 50 per cent, and the symptoms dropped by 40 per cent. So it's economical to immunise these people. And we will be interested to see what happens next year with this policy that Britain is implementing,” he said.

Tuesday, October 24, 2000

[06] Four deaths in three days on the road

A MAN was killed when his moped collided with a car yesterday, bringing to four the number of road deaths in the last three days.

Seventy-one year old Andreas Charalambous died yesterday morning when his moped crashed into an oncoming car on Artemidas Avenue in Larnaca.

The driver of the car - a woman from Kiti -- was unhurt. Police are still investigating the accident.

On Sunday, an elderly couple died after 79-year-old Andreas Yiangou Markou drove into oncoming traffic and collided head-on with another car.

Markou and his wife Ermolia, also 79, both refugees living in Palouriotissa in Nicosia, were returning home from a wedding at about 5pm. The accident happened on Archangelos Avenue in Nicosia. Police believe Markou drove his twin cabin truck into the opposite lane after being confused a roundabout.

The driver of the other car suffered only minor injuries.

On Saturday afternoon, Doria Tymviou, 49, was killed on the Larnaca to Limassol motorway when the car in which she was a passenger lost control and crashed into the cement barrier.

Tymviou was sitting at the back and was fatally hurt. The other two people in the car were not injured.

Tuesday, October 24, 2000

[07] Boyfriend held over child's abduction

A 32-YEAR-old labourer from Nicosia was yesterday remanded on suspicion of helping his girlfriend abduct her own son.

The 35-year-old mother, also from Nicosia, was remanded on Saturday on suspicion of forcibly taking her two-year-old son from his 50-year-old foster mother's home, at Kalo Chorio outside Larnaca, on Friday.

The youngster has been in care all his life.

The mother was arrested after the boy was found wandering the streets of Nicosia on Saturday morning.

Her labourer boyfriend was arrested on Sunday after the mother told police he had helped her with the alleged abduction, the Larnaca District court heard yesterday.

Police told the court the couple had stormed into the foster mother's home on Friday, grabbing the boy after attacking his carer.

The boy was then dropped off at a relative's home in Nicosia while the couple went to a taverna to celebrate, the court heard. The alleged abductors then picked up the boy and drove to a car park in the Strovolos suburb of Nicosia where the couple proceeded to fall asleep, police said. The two-year-old then got out of the car and began wandering the streets. A woman found the boy and took him to police. The boy has since been returned to her foster mother, the court heard.

Police say the mother has admitted to kidnapping her son and has named her 32-year-old man friend as her accomplice.

The court heard that the labourer had confessed to taking part in the abduction but had denied attacking the boy's foster mother.

The court remanded the 32-year-old for two days.

He is expected to re-appear in court alongside his girlfriend today.

Tuesday, October 24, 2000

[08] Two golf courses approved for Limassol

TWO golf courses are to be built in the Limassol area, Tourism Minister Nicos Rolandis announced yesterday.

Plans for a course at Pentakomo outside the coastal town had to be shelved late last year because of strong local opposition, but the government is obviously determined not to be put off.

Speaking after a meeting with the Limassol Chamber of Commerce yesterday, Rolandis said one of the golf courses would be privately run and sited West of Limassol. The location for the second course has yet to be decided.

Despite concerns about the volume of water needed to keep courses green, the government insists golf tourism is the way to go.

In February, the cabinet approved plans for a course on state forest land in the Ayia Napa area. The government has also endorsed plans for a course at Oroklini, near Larnaca.

There are already two courses in the Paphos area, with a third on the way.

Golf and tourism experts insist that the island can only put itself on the golf tourism “map” if it has six or seven courses to offer.

Tuesday, October 24, 2000

[09] Car confiscated after Turkish Cypriot family drive over

A TURKISH Cypriot youth from the north who apparently decided to take his mother and sister for a drive in the government-controlled areas on Sunday has paid for his mistake with his car.

The vehicle, bearing unrecognised occupation regime number plates, was stopped on the Larnaca to Dhekelia road just before 2pm on Sunday by police officers acting on a tip-off.

The driver, a 19-year-old Turkish Cypriot, was arrested for driving an unregistered car without a driving licence or insurance cover.

The 19-year-old, his mother and his 20-year-old sister - who were with him in the car - were handed over to Unficyp officers later that same afternoon and returned to the occupied areas, minus the vehicle.

The driver was first charged in writing and made to sign a guarantee that he would appear before a government court to answer to the charges at a future date.

Police confiscated the car to use it as evidence before the court.

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