Cyprus-Forum.com

[Sotos]

Bank of Cyprus shares continued their advance, gaining another 1.5% in Cyprus and 5.2% in Greece to fresh record highs, as the euphoria of a successful rights issue, plus bullish expectations for a strong third quarter performance and in anticipation of a bullish report by Morgan Stanley combined to push the stock higher.

BOC shares ended Thursday trading up 1.52% at CYP 2.67, a fresh record on CYP 646.000 volume, which was about a third of total volume of CYP 1.99 mln transacted on the CSE.

In Greece, the BOC shares bucked a declining Sophocleous for a second day and raced 5.22% higher to EUR 4.84 or CYP 2.77, with 1.53 mln shares changing hands for a value of EUR 7.3 mln or CYP 4.2 mln, which was double the total volume of the CSE on Thursday.

The Bank earlier announced that it will release its third quarter results on November 1 with a positive profit warning, informing investors that its results will be significantly better than last year.

The imminent issue of an investment report by Morgan Stanley raised expectations that more institutions are starting to cover BOC.

According to reliable sources, the Morgan report may include a buy recommendation with a target above EUR 5. The Financial Mirror has not been able to substantiate the rumours and investors are urged to treat the information with caution.

Thursday afternoon, the Cyprus SEC was due to decide on whether or not it will give the exemption to BOC not to publicise its prospectus on the forthcoming rights issue in the US.

According to Cyprus law, which is fully compatible with EU directives, BOC is obliged to send its prospectus to all shareholders, irrespective of nationality and domicile.

US law on the other hand, specifically forbids foreign companies from submitting prospectus or invitation to solicit money from US citizens and funds, unless a separate application is made to the US authorities.

The BOC dilemma is how to conform to Cyprus and EU laws but at the same time not to break US and other non-EU laws.

The solution may emerge as early as Thursday, when the Cyprus SEC may decide to give an exemption to BOC, not to present its prospectus on the forthcoming rights to US and probably Canadian, Australian and Japanese citizens or funds.

BOC has announced that it wants to raise CYP 110 mln from the market in the ratio of 1 right for every 6 shares held at the exercise price of CYP 1.40 per share.

Assuming that the Bank receives the green-light from the SEC to proceed with the publication of its prospectus on Thursday, then according to the rules, the BOC shares will trade ex-rights a week later on October 26.


BREAKOUT

The Thursday close by BOC at CYP 2.67 is the highest close since May ‘01 and if this level is maintained, then the next target will be the CYP 2.75 level, the previous high since April 2001.

The BOC gains also helped the CSE GENX to a fresh closing high of 106.07 on Thursday, for a daily gain of 1.58% and bringing its year-to-date gains to 45%.

The CSE Main/Parallel index was 1.85% stronger at 1624.5, its highest since inception a year ago. The shares of Laiki Bank also gained to a fresh closing high of CYP 1.76, while Hellenic Bank also closed at a fresh high of 58 cent.

In Thursday trading, 40 titles closed higher, 38 were lower, 20 unchanged while on 67 no trades occurred.

My family has some BOC shares that were bought at a very high price during the rip off period. Would this be a good time to sell them?

[Sotos]

BoC profits soar

THE BANK of Cyprus (BoC) yesterday posted a 66 per cent increase in profit after tax for the first nine months, boosted by cost-cutting and higher earnings from its insurance unit.
The bank, Cyprus's largest, said the earnings affirmed the group's "return to a positive track" after results of the past three years reflected its exposure to a poorly-performing stock market.
"A reorganisation of activities in Cyprus, combined with cost containment and income enhancement, had positive results," the bank said.

Group profit reached £50 million for the nine months ended September 30, while core profit before provisions and tax rose 24 per cent to £129 million.

The bank said there had been a 12 per cent increase in net interest income and a 32 per cent increase in its insurance operations.

Insurance division EuroLife doubled its profits before tax from increased volume in business, lower claims and a satisfactory return on its investment portfolio, the bank said.

The growth in revenue-generating loans and deposits outpaced an expansion in expenses, it said.

In Greece, deposits increased by 19 per cent and loans by 22 per cent. The latter figure was higher than the 16 per cent rise in the broader Greek market, it said.

The bank said third quarter profitability also showed an improvement, rising 25 per cent after tax from the second quarter.

“Based on the Group financial results to date, it is expected that the significant improvement in the Group profitability will continue for the rest of the year,” said the bank. “These results have exceeded the targets set in the Group’s three-year plan from 2005 to 2007.”

Based on the three-year strategic plan, the BoC Group has adopted actions for productivity increase, resulting from changes in the organisational structure of the customer service network and the introduction of more developed and flexible systems and procedures.

It also plans improvement in customer service, introduction of new products and entry into new markets, loan portfolio quality improvement, and the continuation of the Group’s dynamic expansion of profitable operations overseas.

[Sotos]

Bank of Cyprus "buy," target price raised

LONDON, November 2 (newratings.com) – Analysts at Deutsche Bank reiterate their "buy" rating on Bank of Cyprus Group (ticker: BC9). The target price has been raised from C£2.83 to C£3.14.

In a research note published this morning, the analysts mention that the company has reported its quarterly net income short of the estimates. Bank of Cyprus’ NII increased by 10% y/y and loan growth remained robust, the analysts say. The company is aiming at lowering its bad debt charge level to 100 bps by the end of 2007 and is likely to raise the guidance for the year, Deutsche Bank adds. The earnings estimates for 2006 and 2007 have been raised to C£88 million and C£115 million, respectively.

So? Is it time to sell those shares? What do you think?