International investors have shown significant interest in the privatisation of Limassol Port, Minister of Communications and Works Marios Demetriades revealed yesterday.

Commenting on the sidelines of a meeting between governmental officials and financial advisors, Demetriades told the press that the privatisation of the island’s main commercial hub, preparations for which officially began on Tuesday, has already attracted prospective offers.

Local media reports indicate that  International Container Terminal Services (ICTS), a Philippines firm specialising in the acquisition and management of container terminals globally, is among the investors to have expressed interest in purchasing the Port.  

 
Yesterday’s meeting focused on a draft assessment of market conditions and the evaluation of Limassol Port’s competitiveness, physical potential and operational conditions.

“The market assessment shows very good signs and there is interest,” the Minister confirmed.

The Cyprus government has appointed legal firms Kypros Chrysostomides & Co. and Holman Fenwick Willan LLP to prepare the tender.

“We are well within the deadlines, we have appointed a reputable group of advisors with international expertise and we are optimistic about securing investors for the Port,” Demetriades concluded.

As part of Cyprus’ €10 billion bailout, the government will implement a privatisation plan aiming to secure €1 billion by 2016 through the sale of Limassol Port and Cyprus Telecommunications Authority, as well as an additional €400 million by 2018 through the privatisation of the Cyprus Electricity Authority. Proceeds are to be used to reduce public debt. 

The House Finance Committee on Thursday discussed concerns over recent banking practices including a deluge of letters being sent to loan holders and guarantors and a failure to respond to borrowers asking to restructure their loans. Speaking after the Committee meeting Nicolas Papadopoulos said the MPs had been briefed by representatives of the Central Bank, Association of Cyprus Banks and the Law Office of the Republic regarding the issue of banks sending out a deluge of form letters demanding the repayment of loans. Papadopoulos revealed the committee was informed the letters had been sent out on the Central Bank’s instruction. “It was the Central Bank itself which asked all the banks to inform borrowers, guarantors, and all interested parties about the demands they have to face up to,”Papadopoulos said.

He added, in line with what MPs had been told: “No processes have yet been started based on the new repossession legislation since there is a 120-day time limitation so it would be impossible for any procedures to have begun.” Papadopoulos said the bank representatives had said they were at the stage of studying the law and deciding what their next steps would be. He added, according to as yet not finalised data provided by the Central Bank, “Of the €28 billion, some €3 billion has been restructured” until now.

Green Party MP George Perdikis expressed concern over the Central Bank’s stance, adding he believed it was “burying its head in the stand as it does not recognise any pressure being put on lenders by the banks.” “It considers it completely normal for people with small loans of between €3,000 and €5,000 to be bombarded with letters. It considers it completely normal that until now only a very small percentage of loans, just 10%, have been restructured. It also thinks it is normal for banks to continue to violate their own codes,” Perdikis said.

The MP suggested the Central Bank and banks were in cahoots to damage those with small loans and other “weak links” in Cyprus’ economy. - 

President Nicos Anastasiades has expressed hope that all those involved in peaceful efforts to resolve the Cyprus problem and respect the principles and values of the United Nations and the EU will contribute, through decisive action, to end the violation of Cyprus’ sovereign rights by Turkey. Addressing an event at the Presidential Palace on Monday to mark UN Day, Anastasiades reiterated that he has suspended his participation in the negotiations on the Cyprus problem after the flagrant violation of sovereign rights of Cyprus by Turkey. He expressed hope that those involved in peaceful efforts to resolve the Cyprus problem and those who respect the principles and values of the United Nations will contribute through decisive action in order to end the violation of Cyprus’ sovereign rights. The President also expressed hope that Turkey will realize that it is in the interest of the Turkish Cypriots and the neighbouring countries to end the violations of sovereign rights of the Republic and pave the way for the solution to the Cyprus problem as soon as possible. “The discovery of hydrocarbons should never be the cause of friction or conflict. On the contrary, it could be the cause of cooperation and prosperity of the people in Cyprus as a whole." Anastasiades stressed that hydrocarbons belong to the state and that after a solution is found the benefits will be enjoyed by all the legal residents of the country and the neighbouring countries. “We have no reason to deny Turkey from being among the buyers. Through collaboration and by using natural resources as an incentive, we can speed up the solution of the Cyprus problem”.

Courtesy Philenews

The Cyprus government has posted a surplus of €207.6 million – or 1.32% of GDP – in the first nine months of the year, compared with a deficit of €411.7 million – or 2.5% of GDP – in the same period last year.

According to figures released by the Ministry of Finance, the primary balance, which excludes the servicing of the public debt, was €601.1 million between January and September, compared with a surplus of €67.7 million in the corresponding period of 2013.

During a meeting earlier this month with the parliamentary Committee on Budgetary and Financial Affairs, Harris Georgiades noted that the Ministry expects a primary surplus of some 0.5% at the conclusion of 2014.

The economic adjustment programme signed between Cyprus and its Troika of international lenders – comprised by the European Central Bank, European Commission and International Monetary Fund – stipulates that the country must record a primary deficit of €210 million (1.3% of GDP) at the end of 2014, a primary deficit of €258 million (1.6% of GDP) at the end of 2015 and generate a primary surplus of €201 million (1.2% of GDP) in 2016.

Data from the Finance Ministry also reveals that revenue increased in the period January – September to €4.73 billion, up some 4.47% from the €4.53 billion recorded in the same period of 2013.

Expenditure, meanwhile, fell to €4.61 billion, down 7.17% from €4.96 billion.

Ratings agency Standard & Poor’s has raised Cyprus long-term ratings to ‘B+’ and affirmed the short-term foreign and local currency ratings at ‘B’ on strong budgetary performance; the outlook is stable.

STANDARD & Poor’s Ratings Services has raised its long-term foreign and local currency sovereign credit ratings on the Republic of Cyprus to ‘B+’ from ‘B’. At the same time, it affirmed the short-term foreign and local currency ratings at ‘B’. The outlook is stable.

In yesterday’s press release, Standard & Poor’s said that: “The upgrade reflects our view that Cyprus’ economic and budgetary performance has been more positive than we expected over the past six months. The government’s commitment to significant fiscal, financial sector, and structural reforms, along with assistance from its European partners in improving its debt profile, has supported this improved performance. We also view Cyprus’ economic performance as stemming from its relatively flexible labor and product markets, its resilient services sector, and its relatively low tax burden, all of which pre-date the economic crisis. Cyprus’ economic performance has been accompanied by a smaller drop in consumption than we anticipated, which we believe is partly linked to a general loss of confidence in Cyprus’ banks.” Referring to the Cyprus economic adjustment program, S&P noted that: “Cyprus has, in our view, complied with its economic adjustment program, which is financed by the ESM and IMF. We believe that the program should remain on track even if there are disbursement delays by its official lenders.” However, it went on to warn that: “The forecast for domestic demand remains uncertain and presents a risk to public finances. Rapid private-sector deleveraging is underway, with credit growth in households and corporates contracting by over 9% in 2013 and an average of over 8% so far in 2014. High levels of strategic defaults by households on mortgage obligations, however, indicate that 2014’s stronger-than-expected consumption levels may only be temporary. “In addition, the asset quality of Cyprus’ banks continues to decline despite banking sector restructuring. Nonperforming loans (NPLs) were at an estimated 53% in August 2014, the highest in the EU, compared with 46% at the end of 2013. High levels of NPLs also reflect the government’s decision not to create a “bad bank” (which would likely involve government backing).”

Commenting on its outlook, S&P said that: “The outlook on the long-term rating is stable, balancing our view of Cyprus’ progress in economic and budgetary adjustments against outstanding challenges in the financial sector, in particular the deterioration in banks’ asset quality and removal of cross-border capital controls. “We could raise the ratings if the financial sector stabilizes, notably if asset quality improves and economic reforms continue such that growth prospects significantly improve; if budget deficits over 2015-2017 decline more than we currently forecast; or if all capital controls are eliminated. “We could lower the ratings if financial sector stability comes under renewed significant pressure, for example if the deterioration in banks’ asset quality remains unaddressed, if the government seems unable to fulfil ESM/IMF program conditions, or if budgetary performance worsens materially from our current expectations.”

By: Nigel Howarth 

The Bank of Cyprus (BoC) has announced the resignation of two of its board members this week, Xanthos Vrachas and Konstantinos Katsaros.

The resignations will become effective upon their acceptance by the board or within seven days from their submission, if not withdrawn.

In response to the bank’s recent share capital increase, CBC Governor Chrystalla Georghadji recently issued a letter to the BoC’s board, requesting that is dissolve itself and call a General Assembly imminently so that a new Board can be chosen.

Subsequently, the bank’s AGM has been scheduled for November 20. 

New shareholders of the bank will participate in the AGM for the first time. 

American billionaire investor Wilbur Ross and hedge fund Tyrus Capital, which now control a combined 22% of BoC, have already proposed 10 individuals for the new board, Wilbur Ross including himself, Dr. Josef Ackermann, Vladimir Strzhalkovskiy, Arne Berggren, Maksim Goldman, Marios Kalochoritis, Christakis Patsalides, Michael Spanos and Ioannis Zographakis.

Property sales displayed an increase in September, albeit in the shadow of concerns over the fate of the foreclosures bill.

The number of submitted sales documents reached 373 in September, a 31% increase on the 285 submitted in September 2013. The increase was also higher than the 26% rise recorded comparing August 2013 and 2014.

However, Vice Chairman at Real Estate Agents Association Solomon Kourouklides has cautioned, the figures are not representative of so-called true market conditions.

In comments made to Stockwatch, Kourouklides said: “People expected the law on repossessions to be voted in and many rushed to make some sales to service their loans. These sales are not ordinary sales; they are made out of necessity by land developers and private individuals.”

How the property market may be affected by the foreclosures law depends very much, Kourouklides explained, on how banks decide to enforce it, and on other auxiliary laws the House might vote in, such as the solvency law.

Between the start of the year and September, there have been 3,328 property sales, a 24% increase on the 2,684 sales made over the same period in 2013.

Increases were recorded in all towns with Limassol enjoying the greatest rise of 51%, with sales totaling 1,057 compared to 702.

The next highest increase was recorded in the Famagusta district, with a 37% rise from 172 to 235.

Property sales in Larnaca, meanwhile, increased by 24% from 557 until September this year compared to 449 by the end of the same month last year.

In Nicosia, the increase was also 24% - rising from 501 to 583 – while Paphos registered the lowest increase of 4%, from 860 to 896.

The Cyprus International Financial Services Association has highlighted that those paying the Government their immovably property tax dues before October 31, 2014, ahead of the November 30, 2014, deadline, will receive a 15% discount, Tax News reports.

Cyprus's tax on immovable property (IPT) is due in respect of any property valued in 1980 to be worth more than €12,500, with progressive rates ranging from 0.6% to 1.9% on properties valued over €3 million.

Any IPT paid after November 30, 2014, will be subject to a ten% penalty, plus interest and any other administrative charges.

As of today, September 23, a new €10 banknote of the Europa series will enter into circulation, which is described as being more resistant to counterfeiting, and easier to check.

“It’s essential that everyone who uses euro banknotes can continue to do so with complete confidence,” explains Yves Mersch, the ECB’s Executive Board member responsible for banknotes. “That’s why we’re introducing the Europa series.”

Like the new €5, the new €10 has several enhanced security features as well as a fresh look. Its hologram and watermark include a portrait of Europa, a figure from Greek mythology. It also has an “emerald number”. When tilted, the shiny number displays an effect of the light that moves up and down, and also changes colour from emerald green to deep blue. With these features and others, the new €10 is very easy to check using the ‘feel, look and tilt’ method.

To facilitate the introduction of the new banknote and to ensure it is as widely recognised as possible, the Eurosystem has taken many measures to further support the producers and owners of banknote handling machines and authentication devices. One initiative was to make new €10 banknotes available for testing purposes almost nine months ahead of the launch, allowing sufficient time for the equipment to be adapted. Another initiative was to simplify the procedures to receive the new €10 banknotes for adaptation purposes. In addition, the Eurosystem organised – as part of the Eurosystem Partnership Programme – a banknote-related seminar in Brussels, while the national central banks were in direct contact with the relevant stakeholders in their country.

The European Central Bank has received confirmation from the national central banks of the euro area that they have done everything that could be reasonably expected within their capacity to facilitate the adaptation of banknote handling machines and authentication devices in their countries for the new note.

 “To make the launch of the new €10 go as smoothly as possible, I urge all those owning banknote equipment to make sure that it can handle the new banknotes,” Mersch said.

The €10 banknotes of the first series will continue to be issued in order to use up stocks. They will circulate alongside the Europa series €10 before being phased out later on and eventually ceasing to be legal tender. This change in their status will be announced well in advance.

It has been a long common secret that if you want anything done with your property, then you need to know the right people, in the right place and have the right amount in your pocket.
PERHAPS now is the time to ask some embarrassing questions. To begin with, who is the Director of Lands and Surveys for the whole of Cyprus?

What is his annual pay scale and is it performance related? Does he actually exist or is he, like Brezhnev, alive in body only?

The reason for this line of questioning is very simple: If such a person/post exists, why has he not sacked the local Director in Paphos and as many of his lackeys as necessary? It has been a long common secret that if you want anything done with your (or adjacent) property, then you need to know the right people, in the right place and have the right amount in your pocket. Then came along the “powerful” watchdogs, namely the Ombudsman (for your complaints in the case of wrongdoing by public officials), and the Auditor General, who thoroughly inspects every single set of public accounts of every government office and department. The result? Nothing! They were followed by public interest groups, the latest being the local chapter of Transparency International.

Have they achieved anything? Hardly. Although the efforts of those aforementioned should be commendable, they never seem to have gone to the heart of the problem. In other words, to catch the crooks with a hand in the cookie jar. (For now, let’s not discuss the anti-money laundering police unit Mokas). Imagine, all it took was a disgruntled (politically motivated maybe?) mayor to give the order and, lo and behold, a huge case file has been built up involving a major property developer and two (for now) municipal officials.

You may ask, just two? Nothing will ever change until our ego-driven buffoons of politicians proceed to implement clear regulations that will ensure transparency and meritocracy, starting with their own declarations in cases of conflict of interest. Despite the President’s grandiose statements ordering his cabinet to declare everything at the start of the term, events have proven how misguided this show has been.

People in places still get things done, their way.Unless the law on whistle-blowers is passed and properly adhered to (without friends or relatives exerting pressure on investigators) nothing will ever change.

And judging from the apathy by politicians and consumers alike who are sinking their heads deep into the sand, saying that “if banks dished out loans, why shouldn’t we accept them?” we continue to use the pressure system to get away with past mistakes. We don’t realise that we are burdening our future generations, i.e. our sons and daughters, who will have to foot the bill of today’s corruption and incompetence, with the risk of even losing their pensions, if they ever had any hope of getting one.

Where, then, does the buck stop? Anybody?

BY FINANCIAL MIRROR