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 

Cyprus embraces new currency at fast pace

THE EURO changeover has proved to be a success in Cyprus and Malta in the first week of January. The changeover of all cash and non-cash transactions to the euro appears to be going swiftly and without noteworthy problems. After only a few days, the euro had already largely replaced the Cyprus pound and the Maltese lira in people's wallets and purses.

 

Less than week after adopting the euro, nearly three quarters of all cash payments were made in the new currency in Cyprus, the EU Commission said yesterday.

 

A statement from the Commission said that on January 5, some 72 per cent of all cash payments were made in euro and that 74 per cent of Cypriots had only or mostly euros in their pockets.

 

“The adoption of the euro in Cyprus and Malta is proceeding very swiftly. This is testimony to the good preparations beforehand for which all involved in the two countries, starting with their respective governments, must be congratulated,” said Joaquín Almunia, European Commissioner for Economic and Monetary Affairs.

 

“It is now crucial that both countries continue to implement sound fiscal and budgetary policies so that they can fully benefit from economic and monetary union,” the Commissioner said in a statement yesterday.

 

The latest survey, the second since euro adoption, found that the ratio of euro cash payments in shops increased quickly during the first week.

 

Retailers gave change exclusively in euros in virtually all cash transactions where change was given. In Cyprus the figure was up to 97 per cent by last Saturday.

 

As people appeared to be eager to exchange their national cash holdings into euro and to withdraw euro cash, there were still some queues at banks but the situation seemed to be getting back to normal, the Commission said.

 

In Cyprus, some 179,000 over-the-counter exchanges and withdrawals were made between January 1-4, involving some €253 million. In Malta, approximately 132 000 over-the-counter withdrawals took place between January 1 and 5, for a total amount of around €88 million. Some 105,000 ATM withdrawals had been made in Cyprus by January 4, and 202,000 in Malta up to and including January 6.

 

With respect to the conversion of prices into euro, so far only a few incidents of undue price increases have been reported in both countries, said the Commission citing parking fees, cinema tickets and doctors' fees.

 

“The authorities are investigating all these cases and are asking those responsible to revert to the former prices where necessary,” the Commission said.

 

“Consumers are encouraged to remain vigilant and to report any cases of unfair pricing to the authorities or consumer associations.”

 

In Cyprus, Central Bank officials said yesterday that by yesterday around €285 million euros were in circulation and that the Bank had collected up around £120 million.

 

Source: Cyprus Mail

Euro area unemployment stable at 7.2%

The euro area (EA13) seasonally-adjusted unemployment rate stood at 7.2% in November 2007, unchanged compared with October. It was 7.9% in November 2006. The EU27 unemployment rate was 6.9% in November 2007, the same as in October. It was 7.7% in November 2006.

 

In November 2007, the lowest rates were registered in the Netherlands (2.9%) and Denmark (3.2%), and the highest in Slovakia (11.0%) and Poland (8.5%).

 

These figures are published by Eurostat, the Statistical Office of the European Communities.

 

Over the last year, twenty-three Member States recorded a fall in their unemployment rate, two an increase, and Luxembourg and Romania remained stable. The largest relative falls were observed in Poland (12.2% to 8.5%) and Bulgaria (8.2% to 5.8%). Increases were registered in Portugal (7.9% to 8.2%) and Ireland (4.2% to 4.3%).

 

The unemployment rate for males fell from 7.0% to 6.5% between November 2006 and November 2007 in the euro area and from 7.2% to 6.4% in the EU27. The female unemployment rate declined from 9.0% to 8.0% in the euro area and from 8.4% to 7.4% in the EU27.

 

In November 2007, the unemployment rate for under-25s was 14.2% in the euro area and 14.9% in the EU27. In November 2006 it was 15.8% and 16.5% respectively. The lowest rates for under-25s were observed in the Netherlands (5.0%), Ireland (8.1%) and Austria (8.3%), and the highest in Greece (22.6% in the third quarter 2007), Romania (21.6%) and Italy (20.2% in the third quarter).

 

Eurostat estimates that 16.4 million men and women in the EU27, of which 11.0 million were in the euro area, were unemployed in November 2007. In November 2006, 18.3 million men and women in the EU27, of which

12.0 million were in the euro area, were unemployed.

 

In November 2007, the unemployment rate was 4.7% in the USA and 3.8% in Japan.

 

Source: Eurostat

Cyprus euro transition smooth

Cyprus joined the euro-zone on New Years day becoming the 14th European Union member state to adopt the common currency, with most of the conversion going well despite minor difficulties in some shops and smaller bank branches running out of new notes and coins.

 

The introduction of the euro was a landmark in the history of Cyprus, with feelings muted as some people saw benefits of joining the eurozone, while others were sceptical that they had lost the power of a strong Cyprus pound, just as the French gave up the franc and Germans abandoned the mark.

 

The Central Bank of Cyprus too has relinquished its exchange and interest rate setting authority, decisions that will now be taken jointly at the European Central Bank in Frankfurt.

 

Finance Minister Michalis Sarris said at a public celebration moments after midnight that joining the eurozone was an indication of the island’s healthy economy and that “it was a tough ride getting here”. He also congratulated his Maltese counterpart and read out a letter sent to Malta’s president from Tassos Papadopoulos, as the smaller Mediterranean island state also adopted the euro an hour after Cyprus, raising the eurozone members to 15.

 

Sarris said later on Tuesday that the whole operation went smoothly and that most of the Cyprus pound notes and coins will have been collected by mid-January, with some people holding on to samples of bygone days as memorabilia.

 

Few cases were reported of kiosk owners and foreign staff at some bakeries not coping with the new currency and mixed change, or running out of euros and giving change in CYP coins. Pharmacies and fast-food outlets working on Tuesday seemed to have adjusted well with their cash tellers showing both currencies in receipt as well as change.

 

But some people also had some simple questions that remained unanswered, possibly due to the delay in the information media campaign and the absence of practical examples for people to identify with.

 

When Cyprus applied to join the Exchange Rate Mechanism (ERM2) and subsequently headed towards adopting the European single currency as its own, the conspiracy theories of this generally pessimistic nation took a quantum leap with everything that went wrong being blamed on the euro in the run up to the January 1, 2008 date of adoption.

 

Spiraling fuel prices, a drop in tourism, rising property prices and more expensive tomatoes in the traditional salad were all blamed on the anticipated use of the euro, a negative attitude reflected in all recent Eurobarometer surveys that showed low levels of confidence in the euro and the Eurozone club.

 

Source: Financial Mirror