Cyprus Mail: News Articles in English, 00-11-17

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

CONTENTS

[01] Retail fears over stock market slump

[02] Market up after banking trades

[03] Committee chairman to probe conflict of interest claim in helicopter deal

[04] US hails 'real step forward' in Cyprus talks

[01] Retail fears over stock market slump

Stockbroker Demos Stavrides said luxury items, such as cars and household equipment, had been trailing for the last six months in the wake of the index slump. So far this year, there has been a decline of 8.5 per cent in new private car registrations, only 40.6 per cent of which were new vehicles.

Car dealers BMW and Honda yesterday told the Cyprus Mail that business had fallen off in recent months, thanks to the ailing CSE.

"Yes, we've just begin to notice it and recently we've even had some cancellations, particularly from companies who were due to list on the market and now aren't because they're facing problems. That's company cars, but private sales are also decreasing," said the manager of BMW in Nicosia, George Makrigeorgis.

Honda said fears about slack trade were compounded by the strength of the Japanese yen against the Cyprus pound. The company's business has dropped by 10 per cent, compared to last year's boom.

"We are very worried of course, because it seems that with the CSE the way it is, there is no money in the market," manager Christoforos Efthivoulou said. "I think next year will also be very difficult."

But BMW, confident of its up-market niche, was less concerned about long- term effects. "Many of out customers are in the BMW market, regardless of what the stock market does. Therefore, we're not realising the worst of it, " Makrigeorgis added. Top designer clothes boutiques were also confident of holding on to their custom, largely shielded from the vagaries of the market.

One financier yesterday joked that MaxMara sold more in Cyprus per head of population than anywhere in Europe.

But at the other end of the market, Woolworth's also admitted that business was down this November compared to last year.

"To be honest I don't want to believe it, but it may be true, although I'm not worried yet. I think the answer may be advertising or an aggressive marketing policy. Knowing the culture and the mentality of Cypriots I don't think they'll save money at Christmas. It's part of the tradition and when it comes to their children, they don't hold back. Christmas is very important in that respect," a representative for the branch in Makarios Avenue, Nicosia, told the Cyprus Mail. Clothing, footwear and perfumery are the shop's biggest selling departments.

Broker Stavrides agreed with the distinction. "In the clothes and gift sector, I don't think we'll see a downfall, because Cypriots will always but clothes and presents for their children. But as far as things like houses, cars, technical equipment, I think we've been seeing the down turn for the last six months," he told the Cyprus Mail.

He estimated that construction and land deals could face difficulties for up to three years, as investors try to sell land to keep up with loan repayments on money borrowed to play the stock market.

[02] Market up after banking trades

Despite this higher close the majority of shares moved downward.

Trading opened on a high note at around 260 points, rose to 264 but dropped to 262 where it levelled until closing. Volume was &pound;18.9 million which, coupled with the overall downward movement of shares, indicates that this week's selling frenzy was not yet over.

"Today's session was misleading as most shares posted losses and most of the volume was made-up of only a few stocks," said one analyst. Seven of the 12 sectors ended in the red and of the five that gained, the banking sector outperformed everything in sight, notching up a conspicuous 5.17 per cent increase which brokers put down to interest by institutional investors.

BoC jumped 32 cents to end at &pound;4.72 leaving Laiki trailing with a modest eight-cent gain to finish at &pound;5.62. Over 1.18 million BoC shares changed hands on a volume of &pound;5.46 million.

"There was a sharp increase in block deals. I believe there is support from the bank itself in addition to the other institutions," one broker told Reuters. BoC sustained heavy losses this week, its stock hitting a year low of &pound;4.02 on Monday despite the long-awaited flotation on the Athens Stock Exchange (ASE) which everyone believed would be the miracle needed for the market to recover.

Yesterday in Athens BoC ended at 2,820 drachmas (&pound;4.78) after gaining 160 drachmas with 56,885 shares traded.

It was the two banks and GlobalSoft which again made up the majority of volume yesterday. GlobalSoft accounted for &pound;2.19 million of the total adding two cents to close at &pound;5.65.

Two other stocks which gained high despite a low volume of shares were Logicom which added 23 cents to end at &pound;3.90 and Glory which also jumped 23 cents to finish at &pound;5.52.

Ellinas Finance, a relative newcomer to the floor also did well closing at &pound;1.15 after adding 28 cents, and made it to the 'five most active; list with almost 700,000 shares changing hands.

"This company had &pound;153,062 in revenues in 1999 and has a market capitalisation of &pound;18.4 million pounds," the CSE analyst said. "Today's buyers must know something the rest of us don't."

He said the market remains unstable and that today, the last trading session of the week, would be crucial in determining how next week will go.

[03] Committee chairman to probe conflict of interest claim in helicopter deal

Rotsas is the representative in Bulgaria of Bell Helicopter Textron Ltd, the American company with which the government reached an agreement for the purchase of four non-military helicopters, which will cost the state &pound;18 million.

The plan has been put on hold pending defence committee approval of the purchase. The ministry called on the committee to proceed with the matter earlier this year, but it has kept postponing its decision.

Rotsas International Ltd in Sofia represents Bell Textron in Bulgaria and is owned by Christos Rotsas, the company's managing director Cleanthis Kourtis told the Cyprus Mail from the Bulgarian capital. Rotsas has admitted representing the company in Sofia and the Bell Textron Website confirms the information.

But when asked about the matter, House Defence Committee chairman Takis Hadjidemetriou of KISOS told the Cyprus Mail he knew nothing about it. He said the matter was serious and that he would investigate it.

According to parliamentary rules, deputies who decide on purchases must declare any involvement or interest with the supplier company right from the beginning.

"What you tell me is very serious. Rotsas should have let the Committee know about it," Hadjidemetriou said.

Rotsas will not vote on the bill himself, as he is not a member of the Defence Committee, and the matter does not require full Plenum approval, but Hadjidemetriou said this did not let his colleague off the hook.

"Rotsas had an obligation to inform the House about his involvement with Bell Textron as a member of DISY's parliamentary group deciding the party's position on the matter at the Committee."

The Bell helicopters are not military, but are suitable for carrying small groups of people, for fire-fighting, rescue and police operations.

The Defence Ministry plans to allocate extra money to have the helicopters militarily equipped in another European country, since the US maintains an arms embargo on Cyprus since1974.

Only AKEL has so far positioned itself against the proposal at the House Defence Committee. AKEL deputies claim it would be a waste of money since the Bells are not equipped to operate in the National Guard. It has proposed that the government purchase military helicopters from Russia, which it says are cheaper, bigger and already properly equipped. The other parties, DISY, KISOS, the United Democrats and DIKO have asked for more time to think the matter through. DISY deputies are understood to favour the purchase, while DIKO's parliamentary group is thought to be sceptical. The Defence Committee is expected to vote on the issue at the end of the month.

If that hurdle is passed, the government will have to pay Bell Textron a deposit of &pound;2 million by the end of the year.

The director of the Cyprus Centre of Strategic Studies, defence expert Aristos Aristotelous, strongly opposes the plan.

"It is unthinkable that the National Guard is considering the purchase of non-military helicopters, whose type is completely different from military ones. Whatever adjustments they make on them, the helicopters will not be fit to operate properly in the army.

"The decision to buy the helicopters raises questions about whether the plan aimed at compromising military needs for the sake of other political or commercial interests," Aristotelous said in an announcement earlier this year.

[04] US hails 'real step forward' in Cyprus talks

Deputy Director for European Affairs at the US National Security Council, Tony Blinken, said the talks were on a positive track.

"We have been somewhat encouraged that in September and in the round just completed, the UN has been pressing the parties to move in a sense from 'talks about talks' to actual engagement on the substance, and we are encouraged that the Secretary-general conveyed to the parties some ideas for the principles of a settlement and now we would like to see the parties engage in those ideas and for this process to move forward to real negotiations," he said.

Blinken was speaking in a telephone intervention from Washington at a discussion organised yesterday by the Cyprus Union of Municipalities, Associations and Organisations of the Kyrenia area.

President Clerides said on Tuesday that Annan would present details of a comprehensive settlement before June and that depending on the response from the two sides, face-to-face negotiations could begin. Blinken said that if people had been asked 18 months or two years ago whether there would be talks, whether the parties would go to New York,

whether they would engage in talks on substantive issues, people would have been very sceptical. "It was just about a year ago that the Cyprus proximity talks were re- instituted under UN auspices after a stalemate of more than two years and that getting these talks, imperfect as they may be, off the ground is something that we worked very very hard on," he said.

He said the US had worked very closely with the UN and the UK and other interested parties. "It seems to me that now, the critical thing that has to happen, and the Administration in its remaining time in office and the next Administration will strongly support, is moving the talks that we have seen over the past year into substantive negotiations, that can lead finally to a settlement of the Cyprus problem," he said. "I think it is very feasible, very possible and the commitment of this Administration in its time left is to keep advancing the talks in that direction and I am quite convinced that whether it is President Bush or President Gore, the next Administration will do much the same thing", he added.

"I know this is incredibly frustrating for people who have been living with this problem for more than two decades, but I have to tell you that I have at least a little bit more optimism than most of us had 18 months ago, that we are on a constructive path and that we can see the end in sight; we all need just to keep working hard, stay at the talks, keep talking and move these talks into real negotiations."

Cyprus Mail 2000

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