Daily Press Review - 21/3/2019

Intense political-economic backstage

Politis reports that the political and economic backstage of Cyprus has been tense in the past few days, since a range of positions have opened up for highly important posts. Such important choices include, choosing a new Central Bank chief, choosing a new CEO for Bank of Cyprus, the creation of a new Board at Hellenic Bank, after the share capital increase procedure was completed and a new share structure was formed. These choices, the article argues are monopolising the public interest and discussion and rightly so. As it concerns, the new Central Bank chief, the Minister of Finance, Harris Georgiades, in an interview he gave last Sunday to Politis, mentioned that the appointment of the new governor, is a matter of days and said that the President had already determined, which qualities the new CBC Chief should have. In the last few days, a series of names are being rumoured, such as Constantinos Erodotou, executive member of the CBC, Anderas Perisianis, non-executive member of the CBC, Giorgos Syrichas and former executive member of the CBC. The newspaper predicts that the new governor will most likely come from the banking sector rather than the academic circles. The Central Bank also has a vacancy for an executive member that also needs to be covered. As it comes to Hellenic Bank, the article says that the completion of the share capital increase procedure will also bring changes to the Board of Directors, since the new share structure must be reflected. The article reports that the BoD should reflect the fact that Demetra Investment increased its share percentage, Third Point did not participate in the share capital increase and that thereby its share participation was reduced. Also, two new institutional investors entered the Bank’s share structure, the American Pimco and the Cypriot 7Q. The five major shareholders of Hellenic Bank, holding a percentage of over 5% are: Wargaming Group Ltd, 20,61%; Demetra Investment Public Ltd 18,42%; Poppy Sari (Pimco): 17,30; Third Point Hellenic Recovery Fund L, 12,59%; 7Q Financial Services Ltd, 9,99%. The attention is now turned to setting up a new Board of Directors. The Bank’s board consists of 11 members, of which the 7 are independent and 4 are dependent, essentially representing the shareholders. The most likely scenario, the newspaper says, is that Wargaming (which today holds two seats), will only get one seat, as will Demetra Investment (which is currently not represented in the Board) and Pimco. Today, Wargaming has a lot of influence in the Board. The newspaper’s sources report that the shareholders are trying to make the right moves in view of the annual meeting of Hellenic Bank in May. In general however, there is no rush since it is considered unlikely that the annual meeting is called earlier, in order to change the composition of the Board of Directors. The fact that there’s 5 major shareholders, means that a lot of scenarios and alliances are possible, for the formation of the required majority.

Ongoing procedure for Hourican’s replacement

Phileleftheros reports that BoC has already started looking for a replacement for John Hourican, even though he will remain as the Bank’s CEO until September. Already the Board has appointed the firm, Egon Zehnder to find the bank’s future CEO. The Board and the Hiring Committee will convene in the end of the month on the matter. The Bank’s annual meeting will be held on 14 May and it is expected that Takis Arapoglou, will succeed Josef Ackermann as chairman of the Board. What is important apart from the qualifications and experience of the Bank’s CEO, is the person’s annual salary. According to the annual reports, Hourican’s annual salary amounted to €2.10m in 2017 and €1.65m in 2016. The new CEO must, among other, manage the large assets portfolio that BoC has gathered from debt-to-asset swaps. Some of the biggest challenges are the reduction of NPLs, the digital upgrade of BoC and lending a part of its capital flow of €4.4b to ‘healthy’ borrowers. The Bank must also manage the reduction in employees and contacts with ETYK, since this is one of the matters that will emerge in the immediate future.

 

ETYK postpones strike, giving KEDIPES more time

ETYK postponed its scheduled strike action at KEDIPES for next Wednesday. The postponement was decided after negotiations with KEDIPES, in view of it new positions with regards to the trade union’s demands. ETYK said that they expect that their demands will be satisfied. “Based on the information we have at this time, we believe that our organisation’s positions will definitely be satisfied at an acceptable degree and therefore ETYK’s leadership judged that they can postpone today’s two-hour strike, at least for a few days until we have the company’s final position”, the trade union said.

 

ESTIA and e-auctions launch pushed back over and over again

The launch of the ESTIA Scheme has been pushed back many times, as has the launch of the e-auctions procedure. These two matters are closely linked, since the borrowers’ immovable properties will be auctioned-off through the e-auctions procedure. The ESTIA scheme will offer a protection net for borrowers who are not able to pay back their loans. The matters are being examined by the Legal Service, which is currently looking into whether there are any constitutional hurdles for ESTIA. The Ministry of Finance had prepared a plan with 8 different deadlines that weren’t kept. Due to the change in the Scheme’s criteria, the approval by the European Commission’s Directorate-General for Competition was also delayed. Initially, the borrowers would have been able to apply for the Scheme from 1 December 2018 onwards, and the procedure would be complete by 28 February 2019. At the same time, the House’s approval of the €33m budget for ESTIA, once again delayed the Scheme.

 

Tourism industry facing challenges in 2019

The challenges faced by the tourism industry emerged during the Annual General Meeting of the Cyprus Hotel Managers Association which was held in Nicosia on Wednesday, March 20th. The Vice-President of the CCCI, Mr. George Mavroudis, pointed out that for 2019 there are a lot of foreign factors that affect tourism while there are worries for rising competition from neighbouring countries. To address these concerns Cyprus should reach out to new tourist markets to cover any possible negative developments. “Since the external environment remains fragile due to Brexit and other unforeseen events, we should emphasise on improving the services we offer to tourists”, said.

 

Difficult to find staff for entertainment venues

InBusiness reports, there is a growing concern among owners in the hospitality sector, mainly in Famagusta and Paphos, about the difficulty of finding staff for their businesses, in view of the upcoming tourist season. There are around 1,500 vacancies in entertainment venues in Famagusta and Paphos alone, with the interest of Cypriot employees being extremely low. The representatives of the owners of leisure centers highlighted their concerns to the Minister of Labor, advising: a) to allow third-country students attending universities in the area to work in catering businesses to cover auxiliary staff positions and b) recruitment of staff from third countries in Cyprus, especially for this purpose.

 

Projects worth €50m in Ayia Napa

One of the most important developments for Ayia Napa is the fact that the municipality can now act as the Contracting Authority for major projects. Taking this opportunity, the municipality green-lit a total of 17 projects costing around €50m. These projects vary in scale and are either ongoing or scheduled for development. These projects include: the restoration of the Medieval Monastery of Ayia Napa, the upgrade of the road network and the revamp of the Ayia Napa City Center.

 

Invest Cyprus participates in MIPIM

Cyprus Investment Promotion Agency, Invest Cyprus, accompanied by leading Cypriot companies active in the professional services and real estate development sectors, participated in the international MIPIM (Marche International des Professionnels de la Immobillier) that took place at Palais des Festivals in Cannes, France between 12-15 March.  The members of the Cypriot mission were given the opportunity to present the country’s investment opportunities and its advantages as an investment destination. At the same time, they informed participants about Cyprus’ economic recovery and the subsequent recuperation of the property sector. Special emphasis was given to the fact that Cyprus is recording high growth rates, overcoming the economic challenges of the previous years, while it has become a top European destination for visitors and businesses as well as a top choice for second-home purchases.

 

RICS: Increased demand for properties

According to the Global Commercial Property Monitor of RICS on a worldwide scale, commercial property values ​​remain relatively stable for the fourth quarter of 2018, despite increased macroeconomic risks. The strongest absolute growth trends are still being recorded in Europe. In Cyprus, the demand for property appears to have increased in the fourth quarter of 2018. However, the largest increase appears to be recorded in industrial real estate sector in ares of high demand.

 

Misirlis - Troika: Prospects for five years of development in the real estate sector

The Cyprus Land and Building Developers Association (LBDA) informed Troika on the positive prospects of the real estate market, the increase in prices and the expected stabilisation of investors' interest in participating in the citizenship by investment scheme, as well as the possible benefits that can arise from Brexit. The Deputy Chairman of the Association, Yiannis Missirlis, referring to Limassol, pointed out that it is the most preferable region of Cyprus, mainly due to the city's tremendous progress in infrastructure projects, its ability to attract foreign companies relocating to Cyprus and the major projects that add value to the city, such as Limassol Marina, two new 5-star hotels and the ‘City of Dreams Mediterranean’ casino-resort. “Therefore, it makes sense that prices in Limassol are higher than the country average. This is particularly pleasing to many thousands of property owners who are seeing an increase in their properties’ value for the first time, since the recent financial crisis”, he said.

 

The privatisation of Larnaca’s port

The author reports on the Minister of Transport Mrs. Vassiliki Anastassiadou’s meeting with Cyprus Shipping Agents Association representatives on the privatisation of the Larnaca port. The meeting resulted in a positive outcome for the Cyprus Shipping Agents Association. Mrs Anastassiadou reassured the representatives that the Ministry will inform the Legal Service with regards to their requests, concerning the viability of the port for Larnaca–based companies that use the port for commercial purposes. The companies that mainly use the port are companies trading in animal feed, agricultural products and concrete exports. Mrs Anastassiadou also added that, as it seems, the private investors are in favour of resuming the commercial operations of the port. On their part, the representatives of the Cypriot Shipping sector asked for a settlement agreement that will safeguard that the current services of the port and the current charges will not change.

 

Cyprus Ports Authority announces competition for café license at Paphos port

The Cyprus Ports Authority announced a competition for a café license in the Authority’s Western building at Paphos port. The documents for the competition have been uploaded on the eprocurement website, and ANY interested parties can download them from there. The deadline for submission of offers is by 12:00 on 24.04.2019.

 

Insurance companies launch campaigns in view of GHS

Phileleftheros reports that insurance companies are informing their clients through messages and emails that they need to keep their private healthcare coverage. Some insurance companies refer clients to their websites in order to make them decide whether they will continue with their healthcare insurance or whether they will stop cooperating with private insurance companies. Specifically, they inform their clients about the coverage offered in the GHS framework. According to insurance companies alternative services such as acupuncture, homeopathy and chiropractic treatments, as well as visits to nutritionists, the purchase of consumables and medical devices such as glasses, prosthetics and wheelchairs, are not covered by the GHS. At the end of February, trade unions proceeded to a relative agreement which predicts that between 1/3/2019-31/5/2019, businesses and employees will continue to contribute to their trade union’s healthcare plans according to their relative collective conventions.

 

What are they smoking?

The article refers to Dennis Herera, General Prosecutor of the City of San Francisco who, on his own initiative, drew up a draft law that remains to be adopted, with which he asks that the sale of electronic cigarettes, known as e-cigarettes, is banned until the Food and Drug Administration Service (FDA) comes up with its final decision about its effects on health. The companies that produce it, said Mr. Herera, are hiding behind the argument that this cigarette is less harmful, however, the products are 100 addictive. The same goes for the so-called heated IQOS cigarette, according to a recent European conference held in Athens for the World Cancer Day, whether the studies have been completed or not, it surely is aimed at smokers. Phillip Morris’, manufacturer of IQOS, counter-argument is that we quit smoking, which is also its trading moto, however, this is considered misleading because if a smoker cannot use it he turns to a normal cigarette. Finally, the article says it is ironic that the particular company states that over 3.7 million adult smokers have given up smoking and have chosen their product.