ECONOMY

Traders unworried about Greek Cypriots’ ‘No’ in referendum

A vote on UN plans to reunify Cyprus may cause no more than a ripple in Greek stocks, a Reuters poll of traders showed, as the market has already priced in a «no» vote which opinion polls say is most likely. Greek and Turkish Cypriots are to vote on Saturday on plans to reunite the Mediterranean island after nearly 30 years of division before the internationally recognized Greek-Cypriot side enters the EU on May 1. Opinion polls have the Greek Cypriots voting down the plan, with the Turkish side showing a thumbs-up. But both sides must vote «yes» for the Turkish-Cypriot side to join the EU along with the Greeks in the south. All of the 10 traders polled by Reuters said any impact of a «no» vote would be limited and short-term on the Athens bourse. «I expect a negative outcome from the referendum but I do not expect the issue to be the main factor to determine the course of the index. Other issues such as first-quarter results and international markets should affect the index more,» a trader said. Any big waves from a «no» vote would be because of perceptions of new tension in Greek-Turkish relations, traders said. A positive outcome, however, would give the market a boost because most people are not expecting it, an analyst said. «In a positive outcome, the large-caps would be positively influenced, while we might have a negative impact on the stocks related with defense programs,» the analyst said. Bank of Cyprus, the only Cypriot company traded on the Athens Stock Exchange, might be volatile after the referendum result, however, traders said. Its shares closed 2 percent down at 2.44 euros yesterday. «Bank of Cyprus is one of the stocks that already has and most certainly will continue to be affected by the outcome of the referenda,» a trader said, explaining that the bank’s prospects would somewhat depend on the referendum. The stock reached a year-high in mid-February when the reunification talks began in earnest, but has since fallen around 17 percent as it became clear a solution was far from guaranteed. Poll respondents largely saw the general index continuing its upward trend next week to reclaim the 2,500 level, a 26-month high, mainly in anticipation of good first-quarter profit results from companies. The index closed up 0.76 percent at 2,485.02 yesterday, having risen nearly 10 percent so far this year. In a similar poll in Turkey, brokers said that Turkish stock traders have largely priced in the referendum and do not expect a negative outcome to spark large-scale selling. Poll respondents largely saw the main Istanbul share index trading within a narrow range ahead of the vote but said it could rise to between 20,000-20,500 points after the referendum. The index fell 1.32 percent to 19,279.39 points yesterday. (Reuters)