Cypriot banks are robust, Central Bank assures

All banks operating in Cyprus, including the subsidiaries of Greek banks, are robust and secure, Central Bank of Cyprus has announced, commenting on the possible impact of the financial crisis the world is facing and worries over the strength of Cypriot financial institutions.

In response to media questions, CBC issued today an announcement in which it reaffirms that all banks and Greek banks subsidiaries operating in Cyprus “are robust and secure.”

“Cypriot banks do not face any problems and their liquidity remains very satisfactory,” Central Bank notes.

Source: Financial Mirror

Fitch affirms Greece's Alpha Bank at 'A-'

Fitch Ratings has today affirmed Alpha Bank's ratings at Long-term Issuer Default (IDR) 'A-' (A minus) with a Stable Outlook, Short-term IDR 'F2', Individual 'B/C' and Support '2'. The Support Rating Floor is affirmed at 'BBB'. The Long- and Short-term IDR and Individual rating reflect Alpha Bank's strengthened position in the Greek banking system, good, resilient operating profitability and cost efficiency, satisfactory capital and improved asset quality. They also consider potential pressure on asset quality from rapid lending growth in the relatively untested Greek retail market and risks associated with rapid expansion in south-east Europe (SEE).

The Stable Outlook reflects Fitch's expectations that Alpha Bank's sound fundamentals will enable it to continue to perform well and expand its business despite the current difficult global capital market conditions. The preservation of Alpha's sound profitability, asset quality and good management of its rapid expansion in SEE could influence its ratings positively. Downside rating risk could be triggered by asset quality problems arising from rapid loan growth in Greece and SEE, notably Romania, or a marked deterioration in its financial ratios or capital due to the bank's aggressive branch expansion plan.

Alpha Bank's 2007-2010 business plan aims to strengthen its retail banking business in Greece and expand its presence in SEE to take advantage of an under-banked region with still high growth potential. It plans to have 1,010 branches in SEE by 2010 and increase the region's contribution to group profits to 25% (16.4% at end-H108) which, in Fitch's view, is ambitious.

Alpha Bank continues to benefit from resilient GDP growth and credit demand in Greece and the parts of the SEE region where the bank operates. In H108, Alpha Bank was able to maintain its good operating profitability, with an operating average return on equity of 30.5%, thanks to increased contribution to profitability of its banking operations in SEE, a strong and stable cost/income ratio in Greece, and improving cost efficiency in SEE. At end-H108, Alpha Bank's credit risk was satisfactory, with a gross impaired loans/total gross loans ratio of 3.59%, almost in line with top domestic peers.

The considerable improvement of its asset quality since 2006 relates to the bank's strong loan growth, which Fitch sees as a major risk - and increased efforts on collection and significant write-offs. The agency views positively the bank's efforts to centralise and improve credit risk management. Alpha Bank's market risk appetite is moderate, with limited interest rate risk. Liquidity is sound, supported by growing customer deposits, relatively diversified funding sources and improved liquidity risk management. Capital is satisfactory and maintaining it at the current level is a prerequisite, given strong and rapid lending growth in Greece and SEE and the risk of a downturn in the credit cycle.

Source: Interactive Investor

Greece interested in Cyprus’ oil and natural gas reserves

Cyprus’ Commerce Minister Antonis Paschalidis announced there have been informal Greek business interests towards participation in the second run for licenses concerning the exploration of crude oil and natural gas reserves in the coastal area of Cyprus.

The Cypriot government has also confirmed its plans for partnerships with countries willing to supply natural gas to the country.

Source: FOCUS Information Agency

Cyprus exports increase by 16%

Imports from Greece have reached 1.1 billion euros, marking a 16% increase, said Commerce, Industry and Tourism Minister Antonis Paschalides.

Speaking at a press conference on Thursday on the sidelines of the 73rd Thessaloniki International Fair (TIF), Paschalides said that the balance of trade between Cyprus and Greece leans against Cyprus since in 2007, the total commercial transactions rose to 1.3 billion euros, marking an increase of 18%, compared to 2006 when it was 1.1 billion euros.

Cyprus exports reached 214.8 m. euros while exports to Greece amounted to 58.2 m. euros, registering a 16.0% increase compared to 50.1 m. in 2006.

Despite the imbalance, said Paschalides, numbers indicate that the Cyprus market prefers Greek products, putting Greece at the top on imports to Cyprus, while Cypriot products rank second in exports to Greece. “We can say that these figures are at a very good level with good prospects for the immediate future”, the Minister added.

Source: Cyprus News Agency

The Cyprus Re-Connection

Cyprus is finally growing closer to unification. For 34 years it has been divided, following a Turkish military invasion in 1974, which split the country in two. But on Wednesday morning, Cyprus President Demetris Christofias arrived at a compound in Nicosia to meet Turkist Cypriot leader Mehmet Ali Talat, in the hope of finding a resolution to the island’s division.

Christofias and Talat will want to concentrate on the larger economic picture in continued discussions over the coming weeks. Unification of the island would likely give rise to a flood of foreign investment, and also provide a big boost to Turkey’s hopes of joining the European Union. It may even reignite last year’s oil and gas study by the Greek Cypriot Government of untapped resources in the Eastern Mediterranean. A 70,000 square kilometer sea area south and south-west of the island could contain reserves of between 6 and 8 billion barrels of crude.

This is the fifth time the two leaders have met in 2008, and the outcome is looking positive for peace. The two moderate figureheads are backed by a pro-unification consensus from all the key international organizations and governments. "All the stars: the United Nations, EU, United States, Turkey, Cyprus and the United Kingdom, are aligned for the first time," said David Lee of specialist risk consultancy, Control Risks.

But challenges will lie ahead as discussions, continuing on Sept 11, turn to the economy. Economic issues caused the termination of talks in 2004, with the Greek-Cypriots unable to see the benefits of unification at that time; many of the Greeks who lost their homes in the North at the time of the division, would not have got them back. Businesses in Cyprus are struggling too--a report in the Cypriot Financial Mirror’s showed this week that profits for companies listed on the Cyprus Stock Exchange tumbled 47.0% year-on-year, to 465.5 million ($669.4 million) in the first six months of 2008.

And the two sides of the island are still economically unmatched. The Greek-Cypriot South is a prosperous, popular holiday destination, which sees over three million tourists per year, and has been on the International Monetary Fund list of the 32 "Advanced Economies of the World" since 2001. The Turkish-Cypriot North, by contrast, is heavily dependent on agriculture and government service, and has a gross domestic product approximately a third the size of the South. The North has suffered from an international trade embargo and little foreign investment as many have been wary of its de facto administration that is recognized by just one country, Turkey.

Lee says that the most important issue for unification is not the economic disparity between the two sides at present, but the "technical issues" central to the country’s reform, the most pressing of which is how a unified government would run on a day-to-day basis. The potentially explosive issue of housing rights also remains. Many families, especially Greeks who lived in the North, are still not convinced they will reclaim their lost homes.

Source: Forbes.com

Cyprus Tourism Organisation announces the opening of a new air connection

The Cyprus Tourism Organisation (CTO) has announced the opening of a new air connection between Larnaca airport and the Birmingham International Airport by the “Monarch Airlines”, next spring.

According to an announcement, issued here today by the CTO, from March 29, the “Monarch Airlines” will begin operating the new connection twice a week, on Wednesday and Sunday.

The CTO pointed out that the new air connection consists a significant development to improve the Cyprus accessibility.

So far, the “Monarch airlines” operate flights to Larnaca from the airports of Gatwick, Luton and Manchester.

The Cyprus Tourism Organisation also noted that a number of airlines, like Easyjet, Sky-Europe, Flyglobespan, Jazeera, Lufthansa and Emirates, have either initiated air connections with Cyprus, or expanded their routes to Cyprus.

“The CTO will soon announce a strategic plan for developing new air connections between Cyprus and other international airports”, added in the announcement.

Source: Financial Mirror

Cyprus passenger traffic up at Larnaca airport

Passenger traffic at Larnaca airport has reached a new high for the year but not an all-time record, as a total 529 flights over the next three days will carry 76,000 travelers to and from Cyprus.

In all, 35,000 passengers were expected to travel on Wednesday, 16,000 on Thursday and 25,000 on Friday, the most popular public holiday after Easter, the operator Hermes Airports announced.
Thassos Katsourides, General Secretary of the Asdsociation of Cyprus Travel Agents (ACTA) said that more Cypriots are traveling this year than ever before, probably because the public holiday falls on a Friday and many people are combining their vacations over a long weekend or have opted to take the whole week off.

“Cypriots are traveling to Greece, which accounts for more than half going by air or sea, while Britain remains the second choice, primarily due to the expatriate community there,” Katsourides told CyBC recently.

“Eastern Europe is still a strong attraction for holidaymakers, while Cypriots are seen going even to the most exotic of destinations, such as the Far East, but in much smaller numbers than any other national group,” he said.

News reports from the airport said that services seemed to be operating calmly, unlike the chaos that existed a month ago with check-ins being delayed or baggage lost and flights losing their departure slots. The two ground handling companies, Louis subsidiary LGS and Swissport-Vassilopoulos, have been fined a total of EUR 112,000 as they were blamed for the problems, while LGS has appealed the decision saying that the government ignored the inefficiencies of the present terminal buildings.

Paphos should move into a totally refurbished terminal building in November, while Larnaca’s new terminal building will be ready in November 2009

Source: Financial Mirror

Cyprus retail volumes up provision 11.6% in Jan-May

According to provisional estimates the turnover volume index of retail trade increased by 9.9 or 7.0% to 151.0 in May 2008, compared with141.1 in April 2008.

For the period January-May 2008 the index is provisionally estimated to have increased by 11.6% compared with the corresponding period of 2007.

Final figures for April show that the turnover volume index of retail trade increased by 6.9 or 5.1% to 141.1, compared with 134.2 in March 2008.

For the period January-April 2008 the index recorded an increase of 11.1% compared with the corresponding period of 2007.

Meanwhile, turnover by value rose by a provisional 15.2% compared with the corresponding period of 2007 in January-May 2008.

Final figures show that for the period January-April 2008 the index recorded an increase of 14.5% over the corresponding period of 2007.

Source: Financial Mirror

Cyprus economy to grow by 3.5% in 2008

The Cyprus economy is expected to grow between 3.5% to 3.7% in 2008, Charilaos Stavrakis, Minister of Finance, has said. “Under the current circumstances, the rate of economic growth is considered satisfactory, consistently above the EU27 average,” he added.

Speaking at an event organised by the Cyprus Branch of the Institute of Directors, Stavrakis noted that despite international economic challenges, the local economy is a robust economy with satisfactory growth rates, almost full employment, controlled inflation, low interest rates and healthy public finances.

However, Stavrakis admitted that “the rising oil and food prices will eventually affect the economy of Cyprus”.

The inflation rate, said Stavrakis, is expected to range between 4% and 4.5%, compared to 2.5% in 2007, and the unemployment rate for the current year is expected to remain at the same levels as in 2007, when it fell to 3.9% of the economically active population.
The Cypriot Minister also noted that public finances remain at a good level and the fiscal balance is expected to remain in surplus, around 0.5% of the Gross Domestic Product. In addition, public debt is projected to fall to 48% of the GDP in 2008.

Stavrakis pointed out that the decrease in the rate of growth in the construction and banking sectors leads to a smaller increase of the government revenue and puts incremental pressure on the fiscal balance.

“The number of foreign investments in Cyprus continues to grow significantly, according to the data of the Department of the Registrar of Companies and Official Receiver, with Russia becoming the most important economic partner of Cyprus,” Stavrakis noted and added: “Russia is a country with very good economic potential.”

Regarding inflation, Stavrakis stressed that its rising trend needs attention, because any price increase affects Cyprus to a greater extent than other competitive to Cyprus countries. “As a result, Cyprus becomes less competitive”, he added.

Source: Financial Mirror

Property Investors Unfazed By the Credit Crunch & Still Buying Property Abroad

Experienced investors aren’t fazed by the credit crunch and still intend to buy property, especially in foreign markets, the Jet-to-Let Magazine Annual Conference survey has revealed. 

The Jet-to-Let Magazine 2008 Annual Conference recently took place at The Hilton Metropole in London. The conference was attended by a wide range of experienced investors - some with experience dating back four decades – and delegates were surveyed about their property purchases and views on the current investment outlook. The results, which provide an up-to-date snapshot of investor sentiment, show that 77% of respondents felt the credit crunch has not impacted on their desire to invest in property.

Eighty-five per cent of people viewed overseas jet-to-let properties as currently offering better opportunities than the UK housing market and are planning to invest in 17 different countries in the coming year, including Cyprus (39.7%), Morocco (19.4%), France (13.3%), Germany (5.1%) and Italy (4%).

They already had investments in 27 different countries outside of the UK, including Cyprus, France, Dubai, Brazil, Turkey and Spain. The combined property holdings of the investors totalled many hundreds of millions of pounds.

Despite the bleak picture portrayed recently by the media about UK property, 92% of attendees said they already have investments in the UK and 54% said they’re planning on investing this year. In addition, 72% have confidence in the UK property market bearing fruits over the next five years, whilst this rises to 89% over the next 10 years.

“The results clearly show that educated investors understand the long-term nature of property investment,” commented Dominic Farrell, editor of Jet-to-Let magazine and author of the bestselling property investment book, The Jet to Let Bible. “They realise there are currently better opportunities overseas, but still have medium to long-term confidence in UK property.”

Where reasons for investing are concerned, 98% cited property as being a sound long-term pension plan. Foreign currency mortgages were favoured by 98% of people and 78% said they used a specialist foreign currency broker.

Finally, when asked what the best form of long-term investment was, and with a choice of cash, stocks or property, an overwhelming 100% of people declared it to be property.

Notes for Editors

Jet-to-Let magazine is a free quarterly subscription publication aimed at investors and homebuyers seeking superior returns in domestic and overseas property markets. It’s currently delivered to subscribers located in 61 countries worldwide.

Jet-to-Let magazine is edited by Dominic Farrell, author of the bestselling property investment book, The Jet to Let Bible. The groundbreaking magazine is a must-have source of quality investment advice for both novice and experienced investors alike and brings together the views of respected professional investors, developers, financiers and journalists. For more details, or to set up a free subscription, see www.jet-to-let-magazine.com

For more details or interview requests with Dominic Farrell, contact:   0151 482 5543

Cyprus targets 0.1-0.6% budget surplus

Cypriot Finance Minister Charilaos Stavrakis remains adamant that despite the decline in tax revenue, the country will still manage to report a 0.1-0.6% of GDP budget surplus for 2008, or in numerical terms, a surplus of EUR 20 mln to EUR 100 mln.

Public debt meanwhile, is set to drop substantially to 48.5% of GDP in 20008 from 59.7% in 2007 and compared to the EU 27 average of 65.2%, with Stavrakis explaining to the Financial Mirror that the impressive improvement is due to the accounting treatment of sinking funds, as well as the fact that the country is running a budget surplus.

Stavrakis however is worried at the health of state finances, since on the one hand, tax revenue from capital gains taxes is sharply lower as a result of the decline in property prices and activity, while on the other hand, revenue from VAT is up 17%, indicating strong consumer driven activity.

“Consumer consumption cannot keep up at the current pace, which is why I expect that VAT receipts will go back to their ‘normal’ average increase of 7-8%, which is why we need to boost revenue from other sources,” said Stavrakis.

E-government

Stavrakis says one way to improve state finances is to make the economy more competitive, reduce civil servant hiring and place more emphasis on e-government, which improves the level of service, increases efficiency and at the same time is more cost effective.

“80% of state expenditure goes to civil servants pay, which is rising 7-8% annually due to COLA and pay agreements, while 13% goes on the development budget costing the government EUR 1 bln and 7% on operational expenses costing the state some EUR 0.5 bln annually,” says Stavrakis, adding that there is a lot of room for improvement

Source: Financial Mirror

Cyprus to host 2009 European small states’ games

Cyprus will play host to the 13th Games of Small States in Europe (GSSE) on 1-7 June 2009.

The file of the games was presented yesterday by Kikis Lazarides, President of the Cyprus Olympic Committee, in Monaco, where the 12th CSSE start today.

Eight European states participate in the Monaco games, namely Cyprus, Iceland, Luxembourg, Monaco, San Marino, Malta, Liechtenstein and Andorra. Montenegro will be added in the 2009 Games in Cyprus.

Lazarides will be the President of the Organising Committee of the Cyprus games.

Luxembourg will host the 2013 GSSE while Iceland will organise the 2015 GSSE.

Source: Financial Mirror  

Cyprus house prices up 9.1% year on year in May

Residential property prices in Cyprus continued to rise for a fifth consecutive month in May 2007, recording a monthly increase of 1.8%, according to the BuySell Home Price Index prepared by Dr. Stelios Platis and Marios Nerouppos of MFC S. Platis.

The index reached 124.58 in May, compared with 122.44 in April, marking an increase of 9.1% increase over May 2006.

The BuySell Home Price Index, which adjusts for factors such as increases in quality, is the only house price index produced for Cyprus.

According to Financial Mirror calculations, the BuySell Home Price Index has risen on average by 9.3% year on year so far this year, compared with 5.9% for the whole of 2006. House-price growth is therefore accelerating.

BuySell reported that the “Average Home Price” in Cyprus according to the BuySell index was CYP 97,064 (EUR 166,610) in May.

The BuySell Home Price Index was created and is updated monthly on behalf of BuySell Cyprus Real Estate by MFC S. Platis. The Index is announced during the second week of each month and depicts the movement of prices at which residential properties are sold in Cyprus, based on the extensive BuySell Cyprus Real Estate database.

Source: Financial Mirror

Swing-time in Cyprus

Virtually year-round sunshine and a stable economy have long made Cyprus a popular choice for those buying a first or second home in the Mediterranean. Recently cited as a bright spot in the international property market, it was described in the Euro Housing Review by the UK’s Royal Institution of Chartered Surveyors’ as “a rare case of a country shrugging off the gloom”.

Source: FT.com

Demand for expat investment services will grow

A representative sample of 1,321, surveyed by GfK Financial between 24th and 30th April 2007, were asked where they would most like to live in the world. Australia was voted the most popular overseas destination by Britons at 10%, while the most popular European destination was France at 6%.

Of those who would like to live in Australia, 59% were under the age of 45 with just 16% over the age of 65 years. In contrast, of those Britons who would like most like to live in France, 76% were over the age of 45 with just 3% under the age of 25 years.

In total, 42% of respondents had considered moving or buying a home abroad and 44% of these were below the age of 45. Almost two fifths (39%) were aged between 45 and 64 years of age.

The survey, commissioned by Bank of Scotland International, found that 4% of people surveyed already owned a home abroad and two fifths of these were under the age of 45 years (40%). One in five people (19%) with a home abroad were over the age of 65.

"It is the younger generation that continues to be attracted to moving abroad and Australia and France are clearly popular destinations,” said Tony Wilcox, managing director at Bank of Scotland International.

Opportunity for IFAs

Attracted to long term business from young buyers planning for their retirement, an increasing number of IFAs are providing overseas related property advice. IFA Promotions, a non-profit organization with 9,000 IFA members, offers consumers a dedicated expat investment service – with 294 individual advisers listing this in its top eight services (out of 23) and 355 listing overseas mortgages as one of their top seven products.

As a specialized area, however, IFAP chief executive David Elms believes that retirement planning requires a ‘whole of market’ service in terms of product and an understanding of the risk and reward elements of this kind of property investment. “Most IFAs would say, holistically, is this the right thing to be doing and is it part of the right balance of investments,” he explains. “IFAs have to be able to offer more than mere mortgage advice as this is about investment.”

Source: OPP

EU finance ministers back Cyprus’ accession to Eurozone

Eurogroup Finance Ministers decided unanimously in Luxembourg on Monday to suggest to ECOFIN the accession of Cyprus and Malta to the Eurozone as of January 1, 2008. Chairman of Eurogroup and Luxembourg’s Prime Minister Jean-Claude Juncker, told reporters after the meeting which preceded the ECOFIN session that ministers decided to propose Cyprus and Malta’s accession to the eurozone.

He said he had no doubt that European leaders will accept the suggestion for the two countries’ accession on 1st of January 2008, adding that Cyprus and Malta will be invited to take part in the Eurozone ministers’ meeting in September.

On his part, EU Commissioner for economic and monetary affairs Joaquin Almunia described the decision as “very easy” because, as he said, both countries fulfilled the criteria and had a positive suggestion by the European Commission and the European Central Bank.

The Eurogroup ministers’ decision will take an official form today at the Council of the European Union – Economic and Financial Affairs (ECOFIN) meeting which, in turn, will make a suggestion to the European Council meeting of June 21-22 to take the political decision. In July, ECOFIN’s Council of Ministers will ratify the accession of the two countries in the Eurozone, simultaneously locking Cyprus and Malta’s currency against the Euro.
 
Source: Financial Mirror 

Cyprus unemployment 4th lowest in EU

Cyprus has the fourth-lowest unemployment rate in the EU, according to Eurostat. Figures for April show the rate at 4.4% whereas in the Eurozone, average unemployment stood at 7.1%.

The lowest rate was in the Netherlands with 3.3%, followed by Denmark with 3.4%, Ireland 4% and Cyprus 4.4%.

The highest levels were recorded in Poland with 11.2%, Slovakia 10.5%, France 8.6% and Greece 8.6%.
In Cyprus, the unemployment rate for men in April 2007 was 3.7%, women 5.3% and persons under 25 years of age 9.1%.

Eurostat estimates that 16.7 million men and women in the EU27, of which 10.6 million were in the euro area, were unemployed in April 2007. In April 2006, 18.7 million men and women in the EU27, of which 11.8 million were in the euro area, were unemployed.

Source: Eurostat

President pledges support to boost Tourism in Cyprus

The government pledged continued support to Cyprus’ vital tourism industry promising to upgrade the tourism product for the benefit of all, said President of the Republic of Cyprus Tassos Papadopoulos.

He assured that the government will implement measures it has already announced.

In his address at the opening ceremony of the Hoteliers’ Pancyprian Association General Assembly held in Nicosia, President Papadopoulos said that “our firm position is that Cyprus’ reply to competition is offering quality and a special tourist experience to the visitors of the island”.

“I know and recognize the efforts by the Hoteliers’ association to upgrade Cyprus internationally as a high level tourism destination”, he added.

“The government, evaluating correctly the decisive significance of tourism to the economic development of the island and the people’s welfare, maintains in its priority, interests and aims, the continued upgrading of this key sector”, the President added.

He said the increasing competition from overseas “constitutes a challenge” which can only be handled with “upgrading and adjusting to new conditions and facts which demand the quality of tourism product to secure the quantity of the tourist flow”.

Source: The Financial Mirror

Cyprus keeps rates unchanged

The Cypriot Central Bank has kept interest rates low by announcing it is holding the base rate at 4.5 per cent. The Monetary Policy Committee (MPC) of the Central Bank’s Board of Directors decided to keep interest base rates unchanged. Newly appointed Governor of the Central Bank Athanasios Orphanides thus maintained the current 75 basis point spread between the Cyprus pound and euro key refinancing rates.

The MPC, took into account the recent Convergence Reports issued by the European Commission and the European Central Bank and concluded that the local economy is growing at a satisfactory rate, inflation is kept at low levels (decrease to 1.77 % in April 2007 vs. to 2.96 % in April 2006), and that the economy enjoys a high degree of convergence with the euro zone countries and thus is in good shape to adopt the euro by January 2008.

Cyprus, along with Malta, are expected to adopt the euro on January 1, 2008. Both countries must by then phase out the differential with European Central Bank rates.

Despite the deceleration of inflation, however, the MPC is concerned with the expansion in the money supply and increased bank credit to private sector. As far as bank credit is concerned, the MPC stresses the exchange and interest rate risks involved in foreign currency lending, as well as the negative impact from the widening of the Trade Balance from increased private lending.

"There is no need to be hasty in narrowing the gap [with euro zone rates] earlier than what is required," Orphanides said.

The refinancing rate was last changed in September 2006.

The Central Bank kept its two other rates unchanged. The overnight deposit facility was left at 2.75% and the Lombard rate at 4.75%. The decision was unanimous among the monetary policy committee members, Orphanides said.

He also added that there is no issue of devaluation of the pound ahead of the final fixing in July or when the country adopts the euro.

The Cyprus is poised to be locked against the euro on July 10. The pound has spent two years in the European Union's ERM-2 currency system, trading within plus or minus 2.25% around a central parity rate of 0.585274 pounds to the euro.

Domestic credit growth was running at an annual 18.6% in March. M2 money supply also expanded by 17.0% in March from an annualised 14.0% in February, according to the May issue of the monetary policy report.

Orphanides would not be drawn into discussing the correct value of share or property prices. “Compared to 20 years ago, property prices have risen. As for current prices, only time will show whether prices are over-valued or correctly valued. There are many factors and considerations to be taken into account,” said Orpahnides, adding that banks were not over-extended to the property sector.

Source: Financial Mirror 

President ‘certain’ Cyprus will join Eurozone in January 2008

Cyprus will be able to adopt the Euro as scheduled in January next year, President Tassos Papadopoulos believes, as he said in his address at the Annual General Meeting of the Employers and Industrialists Federation (OEB), pointing out that prices are set to drop with the introduction of the Euro and adding that the country has good prospects to overcome practical difficulties which other states have faced when they adopted the Euro.

The President paid tribute to employers and employees for their contribution to the effort to meet European Union criteria in order to be eligible to join the Euro area and told the consumers that they are the most effective guardian of any attempt to quick profit and price hikes.

Papadopoulos stressed that as soon as Cyprus gets the official green light to adopt the Euro from EU finance ministers in early July, a large scale and serious effort will get underway to inform the public at large about the use of the Euro and its fallout.

He reiterated that the social state will not be sacrificed for the sake of the Euro, pointing out that economic growth has allowed the country to achieve both goals, maintain social benefits and join the Euro area in 2008.

“This year’s AGM assumes special significance as it meets with the expectation, I believe the certainty, that very soon the decision for the introduction of the Euro in Cyprus in January 2008 will be taken,” he said.

He said once this is done a campaign will begin to inform and protect consumers from attempts to raise prices and added “the government believes that prices must be rounded up downwards as Cyprus has all the prerequisites to have a 1 per cent or even bigger drop in prices.”

The Cyprus pound, he explained, is stronger than the Euro according to Cypriot and European experts and locking the pound to the Euro on 10 July should lead to rounding up prices downwards.

He urged consumers to be vigilant and report any attempts to make a profit using the change of the currency as an excuse to put up the prices.

The President said Cyprus has managed to achieve two important goals, accession to the euro area and extension of social benefits to those most in need.

“We shall have tangible benefits for the economy when we adopt the Euro and OEB has made a significant contribution to this,” he said, adding that the government promotes sectors that strengthen new investment.

In his speech at the AGM OEB President Andreas Pittas described the adoption of the euro and the accession to the EU as “a historic political, economic and social success”, noting that important socio-economic changes are taking place and local business has shown adaptability and responsibility.

“The European framework offers us safeguards for continuous economic growth, fiscal discipline and political stability,” he said and called on everybody to continue working for a favourable climate to maintain a high level of competitiveness.

On the social security fund, he said all parties concerned must work very hard to address difficulties and implement in good time the necessary policy no matter how painful that may be.

Minister of Labour and Social Insurance Antonis Vasiliou assured the meeting that the government is taking all necessary measures to secure the viability of the social insurance fund.

He said OEB has contributed in a constructive manner and has worked with flexibility and inventiveness and urged the federation to continue investing in new technologies, IT, research and human resources.

The minister said employing workers from other countries is a necessity for Cyprus, which must secure equal treatment and must be controlled.

Source - Financial Mirror

Over two fifths of Brits plan to move overseas

Research undertaken by GfK financial for Bank of Scotland International, from a representative sample of 1,321 surveyed between 24th and 30th April 2007, found that 42% are interested in buying property abroad or moving abroad.
 
When asked where they would most like to live in the world, Britons ranked Australia in the top spot with 10%, followed by New Zealand at 9%. America and Canada were joint third with 7% each. France topped the European destinations with 6% of people wanting to move there, followed by Spain at 5%.
 
Out of the 42% of people who would like to own property abroad, the largest proportion were based in the South East (18%), followed by the North West and London (10%). However, only 4% of respondents surveyed already owned property abroad, with 28% of these based in the South East.

Source: OPP

Top 10 Property Investment Countries for 2008 Revealed in Jet-to-Let Survey

The top 10 countries of most interest to foreign property investors in 2008 have been revealed in a survey conducted by property investment magazine, Jet-to-Let.

In order to provide an up-to-date snapshot of investor intentions in 2008, Jet-to-Let magazine surveyed 1000 new readers who recently subscribed to their free quarterly investment magazine. The results, which provide an interesting comparison with a similar survey conducted last year, show that investor interest is continuing to shift away from the UK buy-to-let market and towards foreign investment opportunities.

Over 50% of investors said they wish to invest in foreign property in the next 24 months, with 35.8% keen to invest in the next 12 months. The number one country for investors was found to be Cyprus, which is unchanged from 2007, with France and Spain ranked second and third. There were three new entrants this year – Italy, ranked at seven, the United Arab Emirates at eight and Brazil, which came in at tenth place.

Dominic Farrell, editor of Jet-to-Let magazine and author of the bestselling property investment book, The Jet to Let Bible, says he’s not surprised that Cyprus scored the top slot in the survey. “The adoption of the Euro on 1st January 2008, the interest rate cut, oil and gas finds offshore and low taxes continue to make Cyprus very attractive for investors and homebuyers alike,” he says.

“France and Spain will always be in the top three for UK and Irish buyers, but the relegation of Spain to number three reflects the change in market conditions and an erosion of confidence following the recent property market scandals, principally in Marbella,” Dominic explains.

Bulgaria, Poland and Portugal all notably dropped out of the 2008 top 10 league, after being featured in last year’s ratings. According to Dominic, “This reflects the ongoing changes in their respective property markets and the perception by investors that there are better opportunities elsewhere.”

Overall, the survey highlights the fact that interest in foreign investment opportunities is still going strong, helped in part by the inflated housing market in the UK and the small returns on offer here, compared to good returns in other countries.

Summing up the current choices of property investors, Dominic says, “We have seen a significant increase in investing in overseas property since the beginning of 2008, which reflects an ongoing ‘substitution’ away from UK, Irish and US property, as well as equities and other financial products. A well-selected, cashflow-positive property in a country with a sound legal framework and economy will always beat alternative investments hands down.”

The Jet-to-Let 2008 top 10 survey results are:

1.Cyprus
2.France
3.Spain
4.Germany
5.USA
6.Morocco
7.Italy
8.United Arab Emirates
9.Turkey
10.Brazil

The top 10 in 2007 were:

1.Cyprus
2.Spain
3.France
4.Morocco
5.Portugal
6.Bulgaria
7.USA
8.Germany
9.Turkey
10.Poland

Cyprus and Malta get euro boost

Cyprus and Malta may soon swap their currencies for the euro. Cyprus and Malta look set to be the next EU members to adopt the euro after their applications cleared the first major hurdle.

Their bids to join the single currency next year were backed by the European Commission and European Central Bank.

They will become the 14th and 15th members of the eurozone on 1 January 2008 if EU leaders and finance ministers give their approval.

Both have been members of the European Union since May 2004.

Good progress

If all goes to plan, EU finance ministers will fix the euro exchange rates for the Cyprus pound and the Maltese lira during a two-day meeting on 9 and 10 July.

Voluntary dual pricing in the national currency unit and the euro is already widespread in Malta, particularly in tourist shops, analysts say.

It also currently applies in Cyprus on receipts in big department stores and in tourist resorts.

The last country to adopt the single currency was Slovenia, which joined the EU at the same time as Malta and Cyprus.

The European Central Bank said both would-be eurozone members were making good progress in meeting the necessary economic performance criteria, as set out in the Maastricht Treaty.

These cover government debt, currency stability and interest rates.

However, the ECB added that further efforts were still needed, particularly in curbing their high debt ratios.
 
Source BBC News 

“Flash estimate” Cyprus GDP at 3.7% in first quarter

According to the “flash estimate” produced by the Cyprus Statistical Service, CYSTAT on Tuesday, GDP growth rose in real terms in the first quarter of 2007 by 3.7% compared with the first quarter of 2006.

Flash estimates are common practice in the EU but this is the first “flash estimate” produced by Cyprus.

Flash estimates are not accompanied by the usual quarter-on-quarter GDP figures or revisions to previous quarters. This means that it is not possible to know at this stage whether a 3.7% growth rate constitutes an acceleration or a deceleration in growth.

However, based on our own calculations, either growth of economic activity accelerated in the first quarter or GDP growth was higher than previously reported in earlier quarters.

Looking at the indicative indices mentioned by Cystat, a case could be made either way.

On the one had, tourist arrivals (Jan-Mar) fell by 3.9% year on year and tourism revenue (Jan-Feb) by 4.5%. Electricity output (Jan-Mar) fell by 2.0% and exports of goods in the same period by 11.4%.

At the same time, manufacturing (up 0.5%) and building permits (up 3.1%) and telecommunications output (up 3.9%) rose fairly modestly in Jan-Feb and imports of goods rose by just 3.4% in the first quarter.

On the other hand, retail trade (Jan-Mar) rose by a strong 8%, air transport (Jan-Feb) by a stronger 9.3% (despite the drop in tourism) and financial intermediation services (banking) by an astonishing 25% in the first quarter.

Although tourism remains the single most important sector in Cyprus, it seems that domestic demand, driven by an awful lot of bank credit, is driving growth.

Source: Financial Mirror

Bank of Cyprus says unscathed by global crunch

Bank of Cyprus said on Wednesday it was unscathed by the global credit crunch, but said it had no immediate plans to expand into new markets.

The Bank, Cyprus's largest lender, posted a 55 percent increase in its 2007 group net profit to 485 million euros and restated its profit guidance for 2008 to 540 million euros, an 11 percent increase over 2007. It is scheduled to release its first-quarter results on May 28.

After a year which saw it launch full banking activities in Russia and clinch a deal to acquire a bank in Ukraine, the bank told shareholders on Wednesday expansion into additional new markets was not foreseen in the near future.

"We expect 2008 to be a year of entrenchment in (existing) new markets, further expansion of our network in Greece and an increase in market shares in Greece and Cyprus," outgoing chairman Eleftherios Ioannou said.

"Although expansion into new markets is not among our immediate plans we are looking at conditions in countries of an interest to us through the presence of representative offices so when we decide to proceed we know the conditions on the ground," he told shareholders at its annual general meeting.

Chief Executive Andreas Eliades said the bank was not exposed to risks from the American sub prime crisis, which has had a domino effect throughout the global financial sector.

"The Bank possibly has the most robust liquidity in the Greek and Cypriot markets because the main source of finance are its client deposits, which are increasing," Eliades said.

Board members elected local real estate businessman Theodoros Aristodemou as its new chairman. Ioannou stepped down after reaching retirement age.

Source: Reuters

Cyprus to become business and investment hub

The Cypriot government aims to turn Cyprus into a regional business and investment hub. The Commerce, Industry and Tourism Minister Antonis Michaelides commented “In the past three years, Cyprus has achieved high rate of growth in satisfactory conditions of employment and low unemployment”.

The government, Michaelides went on to add, is making every effort to promote business through the technological upgrading, the modernization and the expansion of existing industries and encouragement for export trade as well as improved plans and programmes for government grants.

On the energy front, he said the country has to secure its energy needs and bringing into the country natural gas for electricity purposes.

Speaking about tourism, Michaelides said the goal is to modernize and enrich the local tourist product, in line with the strategic development plan for 2003-2010.

Source: Financial Mirror

Registered unemployed drops 2.6% in Jan-Apr

The number of registered unemployed reached 11,419 in April 2006, compared with 12,986 people in March 2007.

The Statistical Service reported that the decrease was mainly recorded in the sectors of hotels and restaurants, transport and trade.

For the first four months as a whole, unemployment fell by 2.6% compared with the same four months of 2006 to 13,566.

Source: Financial Mirror

New marina planned in Famagusta

Southern Cyprus planning authorities have announced plans for the development of a new marina in the Famagusta region of the country.

The marina will be built in the Golden Coast Fishing Harbour region, near to the Avgeniros Gardens and Kalliope Villas. A fishing shelter will be built at Aiya Tirada beach.

 

A range of new facilities will also be built on the development, including restaurants, cafés, pubs and a museum.

 

The regeneration of the area will result in an increase in capital growth for Cyprus – great news for investors who have purchased property to let, as interest in the region will amplify when a completion date is set.

Cyprus passes final Maastricht test

Cyprus appears to have passed the final Maastricht test in what could be the last inflation report before the country’s European partners consider whether Cyprus has met all the Maastricht criteria for adopting the euro.

The EU-harmonised consumer price index in April rose by 1.6% compared with April 2006, slightly higher than the 1.3% recorded in March.

However, the all-important 12-month rate fell slightly, to 1.9% compared with 2.0% in March.

In order to meet the Maastricht inflation criterion, the 12-month harmonised inflation rate in Cyprus must be no more than 1.5 percentage points above the average 12-month harmonised inflation rates in the EU countries with the lowest inflation figures.

In March (latest available data), these were Finland at 1.2%, Poland at 1.5% and Sweden and the Netherlands, both with 1.6%. This yields an average of 1.4% and thus a Maastricht target of 1.4% + 1.5% = 2.9%.

If the 12-month EU rates for April are the same as in March, Cyprus will have met the criterion with a full 1% of leg room.

On May 2nd Cyprus passed its two-year anniversary within the Exchange Rate Mechanism (ERM2). Eurozone member states as well as the Commission and the European Central Bank will now consider whether Cyprus has fulfilled all four Maastricht criteria on inflation, exchange rates, fiscal performance and interest rates. 

A country must spend at least two years within ERM2 without devaluation or serious currency fluctuation in order to meet the criterion on exchange rates.

This requirement has already been met. The maximum shift in the rate of the Cyprus pound against its central parity rate within the euro (0.585284 per euro) since 2005 has been 2% but even then, the pound was stronger than the central parity rate. Today the pound is much closer, at just 0.4% above the central parity rate.

The two other criteria relate to fiscal performance and interest rates. The budget criterion was met in 2006 with a general government deficit of only 1.5% of GDP (the threshold is 3%) and the public debt criterion will probably be deemed to have been met because the debt/GDP fell from 69.2% of GDP to 65.3%, even if it was not below the ideal 60% threshold.

Long-term interest rates have long been within range. So that leaves only the nagging Greek Cypriot worry that someone out there will use the decades-old Cyprus problem as an excuse to veto Cyprus.

The Cyprus problem complicates EU business in all kinds of unrelated areas and Greek Cypriots currently take most of the blame for lack of progress in solving the problem.

Germany quashed rumours last month that it would veto Cyprus by confirming that Cyprus would be judged in accordance with the treaty rules. But rumours popped up again that a veto could come from another quarter.

Source: Financial Mirror

Expats in Cyprus

According to Gulf Weekly thousands of expatriates are enjoying the financial benefits afforded to foreign nationals who take up permanent residence in Cyprus. Lower costs of living, favourable tax regime and a warm, sunny climate have all contributed to the island’s success story.

The publication also highlighted that housing costs are playing a powerful role in helping UK nationals to decide where to relocate. The price of a house in Cyprus is much lower than that of a comparable property in a place such as Spain or France and the island is currently benefiting from a prospering economy.

 

The report concluded that “Cyprus [is] firmly in the top slot for Britons seeking a more attractive destination in retirement”.

The Telegraph also recently highlighted the appeal that Cyprus has for foreign nationals and property investors, citing the recent change from pounds to euros, favourable interest rates and rising house prices.

Cyprus property prices record strong first quarter rise in 2008

Property prices in Cyprus have recorded a 3.3% increase in the first quarter of 2008, according to the BuySell Home Price Index. This takes the year-on-year increase to 18.6%.

Symbolic Cyprus crossing reopens

Greek and Turkish Cypriots have reopened a major crossing in the divided Cypriot capital of Nicosia.

Ledra Street, which had come to symbolise the partition of the island, was declared open by local officials.

It was then closed again for a couple of hours by the Greek Cypriots, after what they called an illegal Turkish Cypriot police patrol.

The crossing was finally re-opened later on Thursday evening after mediation by UN officials.

Protesters had gathered on both sides of the barrier, chanting "Cyprus belongs to its people", after the street had been closed again.

"After consultations with the UN, we have been given assurances that this will not happen again," Kypros Michailidis, Nicosia's Greek Cypriot police chief, told the Associated Press news agency.

Ledra Street was divided in 1964, during a flare in violence between the ethnic Greek and Turkish communities.

New Cypriot President Demetris Christofias and Turkish Cypriot leader Mehmet Ali Talat had agreed to reopen the busy shopping street last month.

The two leaders have also agreed to resume talks on reunifying the island.

Earlier, as the street reopened, an aide to Mr Talat, Osdil Nami said: "We are living a historic day today. We are witnessing one of the obstacles to a solution come down."

EU Enlargement Commissioner Olli Rehn also welcomed the reopening, saying it showed that the two sides were "ready to put aside the difficulties of the past".

Greek and Turkish Cypriots have been divided since 1974, when Turkey deployed troops after a coup by Greek Cypriots who wanted union with Greece.

Ledra Street had been at the centre of the island's leading shopping district before it was blocked in the middle, with military posts either side of the dividing line.

Cyprus' government demolished a wall and military checkpoint on Ledra Street last year.

But plans to reopen the street were rejected by President Christofias' predecessor, Tassos Papadopoulos.

"We still have a long way to go," said the mayor of Nicosia, Eleni Mavrou. "This is the first step. We hope many more will follow."

Source: BBC

Peace talks on Cyprus to restart

The Cypriot president and the Turkish Cypriot leader have agreed to resume talks on reunifying the island.

The deal was struck at a meeting between Demetris Christofias and Mehmet Ali Talat in Nicosia - the first such high-profile talks since 2006.

The two men also agreed to reopen a key crossing in the divided capital.

Greek and Turkish Cypriots have been divided since 1974, when Turkey deployed troops after a coup by Greek Cypriots who wanted union with Greece.

"This is a new era we are starting for the solution of the Cyprus problem," Mr Talat said after the meeting in a UN buffer zone near the abandoned Nicosia airport.

"We shall try our utmost in order to come to an agreed solution for the interest of the Cypriot people, both communities, as soon as possible," President Christofias said.

In a joint statement, the leaders said they agreed that advisers from both sides would meet next week to set up groups to work out detailed agendas for the peace talks.

Mr Christofias and Mr Talat said they would meet in three months' time to "review the work of the working groups and technical committees and using their results to start fully fledged negotiations".

The talks would be held under the UN auspices, the statement added.

Mr Talat said that the Nicosia talks "didn't mention anything about the basis or the parameters of the [Cyprus] solution".

Crossing re-opening

Peace talks have been stalled since 2004, when Greek Cypriots rejected a UN peace plan that was backed by Turkish Cypriots.

Mr Talat favours the plan that proposed making Cyprus a federation of two states with a loose central government.

Mr Christofias, who was elected last month, prefers discussions to build on an agreement reached in July 2006.

This focused on individual confidence-building measures and practical areas where progress could be made.

In Nicosia, the two leaders also agreed to reopen the crossing at Ledra street, a pedestrian thoroughfare that runs along Nicosia's dividing line.

The street has come to symbolise the partition of the island.

The island's partition has long stood as an obstacle to Turkey's bid to join the EU.

The Greek Cypriot south, which joined the EU in 2004, holds veto rights over Turkey's accession.

Source: BBC

Cyprus labour force rises by 5.1% in 2007

The labour force in Cyprus rose by 5.1% in the whole of 2007 to 393,377 people, according to the results of the quarterly Labour Force Survey.

 

Despite the rapid growth, all of the increase in the labour force was absorbed, as total employment rose by an even higher 5.8% to reach 377,948.

 

The number of people unemployed fell by 1.6% to 15,428, yielding an unemployment rate of 3.9%, compared with 4.5% in 2006.

 

In the fourth quarter alone, the labour force rose by 5.5% compared with the same quarter of 2006 to 398,903; employment rose by 6.3% to 384,852 and the number of unemployed fell by 0.4% to 14,051, yielding an unemployment rate of 3.5%.

 

The unemployment rate for young persons aged 15-24 was 10.2% in the fourth quarter compared with 10.5% in the corresponding quarter of 2006.

 

Source: Financial Mirror

 

Of the total unemployed, 62% had searched for a job for a period of less than 6 months; 16.3% for a period of 6-11 months, while 21.7% had searched for a job for one year and over.

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Eurobank to start Cyprus banking in June

The Greek banking giant EFG Eurobank is ready to start full banking operations in Cyprus as early as next month, with corporations and high-net worth individuals among the first to be targeted in the ‘wholesale banking’ offensive that will avoid the opening of retail branches in the initial stage.

Michalis Louis, Eurobank Cyprus CEO, told the Financial Mirror that the Nicosia office, situated on the busy Makarios III Ave., will open for business in June while the Group’s second office in Limassol will start in the first half of 2008.

The recruitment drive is proceeding according to plan with Eurobank Cyprus reaching its first target of 30 staff by the end of May. With the opening of the Limassol office, the number will rise to 40.

“We are building a fantastic team of experienced, highly educated, talented and young bankers,” said Louis.

The top management team now in the making includes Haris Hambakis as General Manager Wealth Management and Antonis Antoniou as Manager Private Banking, both of whom used to work in the top two positions of Laiki Private Banking and were part of the team that earned Laiki’s top Private Banking awards. The Eurobank Private Banking team in Cyprus is further strengthened by the arrival of Tasos Anastasis, formerly with Hellenic Bank Private Banking.

Eurobank’s Wealth Management back office will be headed by Constantia Constantinou, formerly with Marfin Popular Bank, who brings with her vast experience in the area of Custodial and Private Banking Back Office operations.

Stephanos Kassianides will head International Lending bringing his years of experience working with Laiki in Cyprus and the UK, while Andreas Pitsillos, formerly with Laiki eBank and Laiki Hellas and Demetris Eliades have also bolstered the ranks of Eurobank Cyprus. Demetris Shiakkalis, former CFO of USB will become the Eurobank Cyprus CFO and COO, bringing Nikoleta Michaelidou with him. Finally, Katerina Charalambous, formerly with EFG in Greece, will be heading Eurobank’s Business Development.

Top Service

Louis said Eurobank will offer all banking services in Cyprus, without opening a retail branch network, with emphasis placed on corporate and investment banking, private banking and asset management.

“We shall have retail products for our clients, with Eurobank also targeting M&As, corporate restructuring, bridge loans and all sorts of sophisticated deals that our clients may require,” said Louis, adding that Cyprus will enjoy the full range of products now on offer from Eurobank Greece.

Eurobank is renowned for its aggressive and fast decision-making approach, something which Louis and his team intend to implement fully in Cyprus.

The fact that Eurobank expanded to Serbia, Bulgaria, Romania, Ukraine, Poland, the UK and recently to Turkey means that there is a centralized and effective team in Greece with the right mechanism providing support.

The key ingredient to success and the reason why Cyprus corporations and high net worth individuals will be heading to Eurobank Cyprus, according to Louis, will be because of the bank’s competitive pricing, effective and personalized service, the security and experience of Eurobank Greece and also because of the personal connections, know-how and broad understanding of the needs of the Cyprus market.

Source - Financial Mirror

Cyprus unemployment falls sharply y/y in January

The number of registered unemployed fell by more than 1,000 in January 2008 compared with January 2007 thanks to a decrease across several key sectors. 

 

The number of unemployed registered at the District Labour Offices on the last day of January 2008, reached 13,571 compared with 15,041 in January 2007.

 

Falls of around 200 to 300 or more were recorded in the sectors of manufacturing, retail and wholesale trade, transport, restaurants and hotels, and construction.

 

For seasonal reasons the number of unemployed was 783 higher than in December 2007. A registered unemployment is not published but according to the most recent Labour Force Survey the unemployment rate was 4% in the third quarter of 2007.

 

Source: Financial Mirror

Bank of Cyprus profits 'sustainable'

Bank of Cyprus profits are sustainable based on core banking operations and excellent relations built with clients in Cyprus and abroad, said Bank of Cyprus Group CEO Andreas Eliades responding to the global equity meltdown.

 

“I will not comment on the level of share prices, but I can assure you that Bank of Cyprus and Greek banks in general are well placed to ride out the current storm affecting all markets since they are not exposed to the US sub-prime risks and boast adequate liquidity to cover their funding needs,” said Eliades.

 

He was speaking at the inauguration of the Bank of Cyprus floor at the Head Quarters building of the Cyprus Chamber of Commerce & Industry (KEVE).

 

Eliades told the Financial Mirror at the KEVE event that Bank of Cyprus expansion and business development plans are proceeding on schedule and more details about the Strategic Growth plan for 2008-2010 will be released in February.

 

KEVE Chairman Manoths Mavromatis expressed his confidence that global markets will be able to ride out the crisis hitting equities because “many areas continue to register satisfactory growth, unaffected by the slowdown in the US.”

 

Bank of Cyprus has sponsored the 6th floor in the KEVE building as part of its efforts to help the island’s business community.

 

Source: Financial Mirror

Cyprus property 'in continuous demand'

Investors in Cyprus could benefit from continuous demand for rental accommodation, according to an expert.

 

Property writer Mark Dale stated that since the Mediterranean island was hot and sunny for 12 months of the year, it was consistently popular with tourists.

 

He commented:  “Since holidaymakers travel to the region during all four seasons, investors could potentially earn higher rental income than in other markets.

 

"An all-year-round rental season is a huge bonus, especially with more and more holidaymakers looking for winter sun. Cyprus is also easily accessible, as it is serviced by a number of budget airlines. This meant that the Island is likely to attract more people in the next few years”.

 

Source: The Move Channel

Investors flock to ‘record breaking’ Cyprus

Residential property prices in Cyprus broke another record in November as prices rose by 21% year on year, according to the BuySell Home Price Index. This is the highest year-on-year increase recorded by the index, which began in 2004.

The BuySell Home Price Index rose for an eleventh consecutive month to 141.69, recording a significant monthly increase of 2.5%, compared with a month-on-month increase of 3.7% in October. In the year to date, prices were up by 21.5%, compared with a more modest increase of 5.9% in 2006. The increase brought the Average Home Price in Cyprus to CYP 110,390 (EUR 188,613).

 

Source: Cyprus Mail

Flymonarch.com launches flights from Larnaka to London Gatwick

Award winning low fares airline flymonarch.com is to launch scheduled flights from Larnaka to London Gatwick this March with up to four schedule flights a week.

 

According to a press release issued by Hermes Airports Ltd, the company which has taken over Larnaka and Pafos airports, the new service from Larnaka to London Gatwick will commence on Wednesday 19 March 2008 with direct flights operating up to four times per week on Mondays, Wednesdays, Thursdays and Saturdays. Fares starting from EUR75 one way excluding taxes and charges (EUR150 return).

 

Commenting on the introduction of this new service, managing director of monarch.co.uk, Liz Savage said that “following on from the announcement to launch flights to Manchester last month we are delighted to be adding flights from Cyprus to London Gatwick as well, meaning we will operate up to 30 flights a week between Cyprus and the UK this summer with 130,000 seats available.”

 

Bob Manning, CEO of Hermes Airports Ltd said that “we are delighted to welcome this new service by Flymonarch.com. These new flights will offer an additional choice for British independent travellers to fly to Cyprus, and for Cypriot business travellers, tourists and students for their direct flights to London and onward connections.”

 

Just one month ago the low fares airline flymonarch.com announced its decision to launch flights from Cyprus to Manchester .  

 

Source: Financial Mirror

Eurozone rates kept at 4% by ECB

The European Central Bank (ECB) has left interest rates unchanged at 4%.

High oil prices and an increase in the cost of food have buoyed inflation in the eurozone at a time when economic growth is seen slowing.

 

The ECB has said inflation remains a problem, noting that December's annual rate of 3.1% was above its 2% target.

 

It is not alone in having to balance growth and inflation problems. The Bank of England also left its main interest rate unchanged on Thursday.

 

The Bank left its main UK borrowing rate at 5.5%, despite calls from retailers and many business leaders for a cut to boost economic growth.

 

One analyst predicted that it would be a long wait for a change in eurozone rates.

 

"After the ECB raised interest rates to a roughly neutral 4.0% in June, the strong euro and the lingering turmoil in money and credit markets will likely keep the central bank on hold until September 2008," said Holger Schmieding at Bank of America.

 

There were strong comments from ECB President Jean-Claude Trichet at a news conference to explain the rate decision.

 

He warned eurozone employers not to allow wages to spiral.

 

"We call upon them to behave properly," he said.

 

"We will not tolerate that you will engage in a spiralling (of inflation)."

 

Mr Trichet appeared to be warning that employers need to control wages or there would be an immediate rise in interest rates.

 

"I think that the ECB feels that inflation expectations have not picked up sufficiently to warrant a rate hike today and they're just sending out the message to make sure the expectations don't pick up," said Mark Miller at Bank of Scotland Treasury Services.

 

Source: BBC