Today's M^3 - Cypriot Stock Market Worst Performer For 2011

Which equity market is the worst performer of the year? If you were thorough enough to read the title of this post then you would know the answer is Cyprus, the subject of today's Major Market Move post. The stock market in Cyprus is down over 33% for the year, with Greece in a distant second at -24%.


Cyprus has their own serious debt issues but Cypriot banks also have significant exposure to Greek sovereign debt. Cypriot sovereign debt was recently downgraded 3 notches by Fitch.
From the Cyprus Mail:

“Right or wrong, the [foreign] markets’ assessment is that Cyprus is next in line to enter a support mechanism, much like Greece. Consider: right now our loan spreads are as bad as Portugal’s when that country was about to receive financial support.”

There has hardly been any media coverage about Cyprus. That's either because of its relatively smaller size or it's due to the fact that the letter C screws up the PIIGS acronym. Regarding its size, Cypriot GDP is twice the size of Iceland's and Iceland generated a fairly sizable shock wave when it blew up at the end of 2008.

Here's the line chart of the main equity index in Cyprus, the General Market Index CSE:



(Click on the images for a larger view.
Click here for the current performance of global equity indexes.
Click here for the current chart of the General Market Index CSE.)