Moody’s Investors Services said that despite the Cypriot economy’s robust growth the strong fiscal performance faces challenges related to its small size, relative lack of diversification and high levels of indebtedness.

“Cyprus’ growth momentum, coupled with strong fiscal performance, helped to reduce the country’s debt-to-GDP (gross domestic product) ratio in 2016 for the first time since 2008,” Moody’s senior vice president Sarah Carlson, who authored an annual credit analysis report on the island’s economy, was cited as saying on Monday.

“We expect a decline in the debt-to-GDP ratio to close to 100 per cent by the end of this year. The country has regained capital market access and has a cash buffer, which will help to cover financing needs next year”.

The report, titled Government of Cyprus – Ba3 Positive, Annual Credit Analysis, said Cyprus’ economic output, expected to increase 3.5 per cent this year, is forecast to expand 3.2 per cent in 2018, for the fourth consecutive year after exiting a prolonged recession in 2015.

The report does not include any rating action. Moody’s last upgraded Cyprus’ sovereign credit rating two years ago by two notches to B1, which is four grades into the speculative area or junk.

“Although Moody’s expects household private debt servicing to result in a deceleration in the growth of private consumption, it is still likely to be the main driver of the ongoing expansion, supported by favourable developments in the labour market and the important tourism sector,” the rating company said. “After the strong fiscal consolidation efforts realised in recent years, the government’s 2017-19 medium term fiscal plan assumes a broadly neutral fiscal stance, with a slight deterioration in the general government budget balance pencilled in for 2018”.

The rating company expects the government to generate a fiscal deficit of 0.4 per cent of economic output this year, compared to a fiscal surplus of twice as much the government has forecast by, it said.

A 2.1 per cent primary surplus will help reduce public debt which fell to below the 100 per cent level three weeks ago with the partial early repayment of debt to the Central Bank of Cyprus.

“Cypriot government debt remains affordable, reflecting the very large share of official sector creditors in the total debt stock,” Moody’s said. “Interest charges took up only 6.6 per cent of general government revenue in 2016, down from a peak of 9.2 per cent in 2013, and this is likely to stay just below 7 per cent over the next two years. In Moody’s central scenario, public debt will decline to around 92 per cent of GDP by 2019”.

“However, Cyprus’ debt metrics still remain vulnerable to a negative growth, fiscal or a combined shock scenario,” with the island’s economy being “susceptible to every risk” given the vulnerabilities of the banking sector which still struggles with a non-performing loans ratio of around 45 per cent, Moody’s said.

“The positive outlook on Cyprus’ sovereign rating reflects Moody’s view that improvements in economic resilience and fiscal strength are likely to be sustained,” the credit rating company added.

Source: Cyprusmail

Bank of Cyprus (BoC) said Tuesday it generated an after-tax loss of €553m on reduced net interest income in the first nine months of the year, as it announced new initiatives to reduce bad loans faster.

The island’s largest lender had recorded a net profit of €62m at the same period last year.

BoC said it also received regulatory approval to set up a real estate fund and have it listed on the Cyprus Stock Exchange.

The bank’s income dropped 3 per cent in the first nine months, to €693m, mainly on reduced net interest income, which fell 13 per cent, to €454m.

Total provisions and impairments rose to €840m in the first three quarters of 2017, from €301m a year before, or 180 per cent, the bank said.

It includes €729m in provisioning charges, up 173 per cent, €38m in impairments of other financial and non-financial assets, up 11 per cent, and €73m in provisions for litigation against zero in the respective period last year.

The bank reduced its delinquent loan portfolio by €588m in the third quarter to below €9.2bn, or 47.6m, for the very first time since the introduction, in December 2014, of the current classification rules for non-performing loans ,which include a probation period for restructured loans, it said.

At the end of June, non-performing loans stood at €9.7bn, or 50 per cent.

“Today we are pleased to announce the first of these accelerative non-organic balance sheet repair initiatives,” the bank’s chief executive officer John Hourican was quoted as saying. “Following approval by CySeC (the Cyprus Securities and Exchange Commission) to register a real estate fund as an alternative investment fund (AIF), the bank is launching a Real Estate Fund to be listed on the CSE, subject to meeting certain conditions. This circa €190m fund is the first of its kind in Cyprus and adds further pace to our efforts to accelerate balance sheet de-risking”.

Hourican said that the lender, which pioneered the banking sector’s fight against non-performing loans with the creation of an internal division for loan restructurings and recoveries, maintained its momentum in reducing bad loans for a tenth consecutive quarter.

In the first nine months of the year alone, BoC reduced its non-performing loans by €2bn, Hourican said. Since December 2014, they dropped by 40 per cent while the coverage ratio against delinquent loans rose “above the EU average,” to 49 per cent.

“We expect the organic reduction of our non-performing exposures stock to continue its downward trajectory in the coming quarters,” the Irish banker said. “At the same time, we are actively exploring structured solutions to further accelerate reduction and further normalise the bank.”

The bank’s real estate management unit took on assets worth €356m in the first nine months of the year, including €127m in the third quarter, it said. Its revenue in the first nine-months of the year was €204m, including €64m in July to September.

BoC, which had its share listed at the London Stock Exchange (LSE) in January, saw its cost-to-income ratio rise to 45 per cent, from 42 per cent the previous year, at the end of September.

Its net interest margin fell to 3.18 per cent from 3.51 per cent in September 2016.

“The bank continues to make steady and positive progress in its journey back to strength,” Hourican said. “Our results this quarter reflect our previously communicated strategy. In the third quarter, we continued to direct all operating profitability to further increase coverage levels on delinquent exposures to best position the bank to present a more normal credit cycle charge in 2018”.

The lender which fully repaid its outstanding emergency central bank liquidity in January, saw its deposits rise 5 per cent in nine months, to €17.3bn in September, against a 5 per cent drop in loans to €14.8bn, it said.

Source:Cyprusmail

October saw the highest number of tourist arrivals in Cyprus ever recorded in the tenth month of the year, the Statistical Service of Cyprus reported on Friday. 

Cystat announced that on the basis of the results of the passengers survey, arrivals of tourists reached 406.870 in October 2017 compared to 357.194 in October 2016, recording an increase of 13.9%. 

“October 2017 had the highest number of tourist arrivals ever recorded in Cyprus during the specific month” Cystat noted. 

“For the period of January – October 2017 arrivals of tourists totalled 3.408.473 compared to 2.974.412 in the corresponding period of 2016, recording an increase of 14.6% and outnumbering the total arrivals ever recorded in Cyprus during the first ten months of the year” it said. 

Tourist arrivals from the United Kingdom increased by 0.5% in October 2017 compared to October 2016 while tourists from Russia increased by 7.1%. Increases were also recorded from other important tourist markets, such as Germany (73.1%), Israel (55.1%) and Sweden (35.8%). 

In contrast, tourist arrivals from Switzerland saw a decrease of 3.1%. 

The United Kingdom and Russia were the main sources of tourism for Cyprus for October 2017, with 33.1% and 21.5% respectively, while arrivals from Germany stood at 7.7%, from Israel 6.0% and from Sweden 4.7% of total arrivals. 

A percentage of 83.3% of the tourists reported that the purpose of their trip in October was holidays, while 10.1% said they were visiting friends and relatives and 6.6% said they came to the island for business. 

Men represented 44.7% of tourists and women 55.3%. Most of the tourists were between 20-44 years. 

Source: Stockwatch

The competitive advantages that Cyprus offers to investors are the subject of a conference being held in central London, attended by the Presidential Commissioner Photis Photiou, a number of entrepreneurs and business professionals from Cyprus and members of the UK capital’s investment community. 

In his address to the delegates on Thursday morning, Mr. Photiou said that Cyprus has overcome many of the economic problems of recent years and now “focuses on attracting investment in the productive sectors of the economy, as a government priority.” 

The Presidential Commissioner referred to the positive fiscal data, the restored competitiveness of Cyprus through structural reforms and the economic sectors that can attract direct foreign investment. “We are on the right path towards full re-establishment of confidence among the investors’ community,” said Mr. Photiou. 

Speaking to the Cyprus News Agency, the Presidential Commissioner noted that his message intended to assure investors that Cyprus has managed to leave behind many of its recent problems. 

“Cyprus is in a position today to be one of the most attractive destinations for foreign investment. This is why we are here today, with a group of distinguished entrepreneurs and professionals form Cyprus, to convey this message in the best way possible. The advantages are legion and the growth rate of our economy after all those problems is significant, it reaches almost 4% of GDP. You can appreciate that with everything that is happening with regard to reforms, especially about the one-stop-shop for investors, Cyprus can really be this attractive destination,” said Photis Photiou. 

The Director-General of CIPA Natasa Pilides presented more detailed figures about the positive fiscal data and highlighted some of the competitive advantages that Cyprus offers: the access to multiple markets, the excellent tax, and legal structure, the low cost, and friendly business environment, the access to talent and funding, as well as the quality of life. 

She also referred to the economic sectors actively inviting investment: financial services, investment funds, shipping, tourism, start-ups and innovation, health, energy and real estate. 

In his introductory address, the High Commissioner of the Republic of Cyprus to the UK Euripides Evriviades referred to the challenge of Brexit but stated his conviction that the long-lasting links between Cyprus and the UK will not be upset. 

The ‘Business Direction: Cyprus – A perfect place for investment’ conference is held under the auspices of the Presidential Commissioner. A number of distinguished speakers and panelists are exploring the prospects of investing in various sectors of the Cypriot economy, from real estate and shipping to fund management and financial services. 

The CEO of the Bank of Cyprus Nick Fahy, one of the panelists, commented that a lot of work has been done in restoring the island’s banking sector’s reputation and that “all the building blocks are there” to achieve sustained growth. 

Omiros Sarikas, Founding Member and Managing Partner of London’s Brookstreet Equity Partners said that Cyprus has been taking the right steps to foster entrepreneurship and innovation, things that are being noticed by investors.

If you want to retreat to a relaxing space at the end of the day (and who doesn't?), you don't have to invest thousands of dollars for a top-to-bottom makeover. All of these ideas are simple enough to pull off in a day or two and will make a dramatic difference in your room.

Buy new bedding.

If you don't already have one, consider a duvet or comforter. New bedding can create a whole new look, taking your room from graphic to girly, modern to classic, primary to pastel and more.

Add new hardware.

Replace old drawer handles and pulls with decorative ones. This low-effort trick adds personality and style to nondescript or inexpensive furniture. Want proof: The rings on this nightstand perfectly match the nautical theme.

Hook up a headboard.

Make even the simplest bed look lush and sleek with a wall-mounted headboard. You can even create a fun painted-on version using a wall stencil headboard.

Dress up the dresser.

Adding a statement-making display on top of your storage will draw the eye away from overflowing drawers (our favorite little trick). This home takes advantage of a hanging poster and brass figurings, but framed family photos also do the trick.

Clear the clutter.

Rid the bedroom of anything that isn't conducive to relaxation or romance. This includes the TV, since research shows having one in the boudoir hinders sleep. At the very least, hide any stress-inducing clutter in a stylish container.

Create a reading corner.

All it takes is a cozy chair, a standing lamp and a new book to make the corner of your bedroom feel like a brand new space.

Add interesting trim.

The simple addition of rickrack, ribbon or trim borders on bed skirts, pillowcases or shams can yield glowing results. The blue details on this bedding ties in colors from the headboard and creates a cohesive look.

Lay down a rug.

Adding a properly-sized area rug makes a room look bigger and more pulled together, even on top of carpeting. One warning: Be sure to choose one that's large enough to tuck under the bed and at least one other piece of furniture. 

Get your move on.

Even a slight shift in a room's furniture or decor (especially bookshelf styling) can add new life to familiar quarters, so don't be afraid to shake things up. And while you're at it, rotate and flip your mattress to prevent uneven wear.

Bring in a bench.

Nothing elevates a bedroom faster than a bench at the end of the bed. This woven bamboo and seagrass design offers storage, bonus seating and a natural touch to the space.

Source:GoodHouse

The government is striving to make Cyprus a world-class destination for business and investment, President Nicos Anastasiades said on Monday, as he received on Monday the credentials of the Ambassador of the Grand Duchy of Luxembourg Cyprus, Paul Steinmetz,

Presenting his credentials, Steinmetz said both countries are well aware of the importance of connectivity and both specialize in developing connectivity in financial services.

“We need to look into possibilities and especially develop flight connectivity between our countries so more tourists may visit,” the ambassador said.

He congratulated Anastasiades for “steering your country through the troubled years after 2013. The economy of Cyprus is doing well and the growth forecast was recently revised upwards.”

On the Cyprus issue, he said Luxembourg greatly regrets that the problem remains unresolved despite the best efforts of all parties over many decades.

Luxembourg, he stressed, “is fully in support of the efforts of your country to reach a comprehensive settlement aiming at the reunification of the island, in accordance with the relevant UNSC resolutions.”

Replying, Anastasiades reiterated Cyprus’ deep appreciation for Luxemburg’s strong support to efforts to end the unacceptable status quo and reunite the country and its people.

He underlined once again “our unwavering determination to end the division of the island and our commitment to exert every effort to reach a comprehensive settlement.”

On relations between the two countries, the president said that he is confident that the two countries can continue to constructively work together so as to intensify their close cooperation even further in many fields, including new ones, from economy to innovation and entrepreneurship, and from tourism to culture and education.

Cyprus continues to be a highly competitive centre for international businesses, offering a platform for operations and preferential access to markets like Europe, Middle East, North Africa and Asia, he said.

Anastasiades added that the government was now focusing on attracting investors in the productive sectors of the economy and efforts have yielded results.

Foreign Direct Investment has seen a 9.1 per cent rise in 2016, compared to the previous year, which was the second largest increase at EU level, the president said.

“This is my Government’s most important priority, following the restoration of the state’s and the financial system’s credibility,” he said. “The majority of economic sectors in Cyprus present growth opportunities: energy, tourism, shipping, real estate, education, health, transport, research and innovation.”

Source:Cyprusmail

The European Bank for Reconstruction and Development (EBRD) has upgraded its growth forecast for 2017 and 2018, by 1% and 0.3% respectively, for the Cypriot economy, with concerns however regarding the very high levels of indebtedness in the economy and the large legacy of NPLs. 

In a report on the growth in 37 countries in which it has invested, published on Tuesday, EBRD expects that the growth rate of the Cypriot economy will reach 3.5% from 2.5% in its previous estimate, in May 2017. For the year 2018, it expects a growth rate of 2.5%, up from 2.2% estimated in May. 

According to EBRD, “economic activity has speeded up in 2017, building on the robust recovery of the past couple of years,” and “GDP growth is estimated at 3.6 per cent year on year in H1 2017, driven by strong performances in retail and wholesale trade, construction and manufacturing.” 

It furthermore notes that “leading indicators point to another exceptional year for tourism, which is continuing to benefit from instability elsewhere (in the first nine months of 2017, the number of tourist arrivals was nearly 15 per cent higher than in the same period in 2016).” 

“In light of these trends, we are upgrading our annual GDP growth forecast for 2017 from 2.5 to 3.5 per cent,” EBRD says. 

EBRD notes that “we also expect the solid economic recovery to continue in 2018, at a moderated rate of 2.5 per cent.” 

“Nevertheless, significant headwinds remain, including the very high levels of indebtedness in the economy, and the large legacy of NPLs which still account for nearly half of all loans and are being dealt with only slowly,” EBRD warns.

Source: Stockwatch

As a child, decorating our bedrooms was usually a source of enjoyment and creativity. It was the only place where we could reflect our inner selves through whatever colors or themes we chose. As we’ve grown up we still make decorating decisions based on how we want a room to make us feel, but those desired feelings change. Instead of bright exciting colors, we want our bedrooms to make us feel relaxed. After all, when the world out there is such a crazy place, it’s nice to have a calm space to wake up to and lay your head at the end of the day. The paint color for your bedroom is a very important decision to achieve this goal. There are four colors in particular which are great choices for creating a soft relaxing space to sleep. Take a look at the four best paint colors for bedrooms and decide which works best in yours.

No. 1: Blue

No. 2: Green

No. 3: Gray

No. 4: White

Source:Homedit

Unions at the state power company EAC on Monday appeared still poised to go through with an announced two-hour strike for later this week, amid fresh pleas from the government to put off the industrial action.

The unions have announced that a first strike will be taking place this Thursday between 7am and 9am, followed by a 24-hour action a week later if their demands are not met in the meantime.

Electricity production is not expected to be affected during the two hours, though customer service outlets will remain shut.

Source: CyprusMail

Parliament on Friday approved a bill imposing 19 per cent VAT on the sale of building land, fulfilling an EU condition some 10 years after the original deadline.

The bill passed with the votes of 26 MPs from Disy, Diko, Solidarity, and the Green Party.
Eighteen MPs from Akel, Edek, Elam, and one MP each from Diko and Solidarity, voted against.
The law in question should have been passed by January 1, 2008 and delays prompted the EU Commission to warn Cyprus repeatedly with stiff fines.

The new law will come into force on January 2, 2018.

House finance committee chairman, DIsy leader Averof Neophytou said VAT can be recouped and will only be imposed in cases where the land is sold by a company or businessman registered with the VAT service.

Neophytou said the new arrangement could create some short- or medium-term liquidity problems. He reminded parliament that Cyprus has already received a second official warning from the European Commission over the delay in passing the bill.

Some MPs voiced concern over the way the law would be applied by the tax commissioner who has the power to decide whether a transaction is commercial or not.

Main opposition Akel warned about the possibility of newly-weds having to pay the tax when buying a plot to build their home.

Akel MP Giorgos Loukaides said there was nothing in the bill ensuring it would not happen.

“We have not in any way ensured that new couples will be exempted from paying tax on their first house,” Loukaides said

The land falling under the category of undeveloped building land will be determined by regulations passed by parliament.

Protected zones and farming land will be exempted.

VAT will be imposed on all sales of building plots taking place as part of economic activity.

According to the tax commissioner, any other cases will be examined individually

Sorce: CyprusMail