Daily Press Review - 24/7/2019

Demetra Investment posts significant profit

Demetra Investment’s profits rose to €11.7m in the first six months of 2019 and mainly due to the company’s investments in the Cyprus Stock Exchange. Specifically, €11.5m of their profits resulted from their investments in CSE. Profits from dividends amounted to €553K, while profits from deposits amounted to €110K, compared to €170K in the same period last year, due to the reduction of deposits and the reduction of interest rates. At the same time, the costs incurred by the company also rose, amounting to €1.1m in the first semester of 2019, compared to €727K in the same period in 2018. As the company explains, this increase is due to unusual costs incurred and is mainly related to their investment in Hellenic Bank. The company explains that the total new investment they made in Hellenic Bank amounts to €49.3m and that they are currently examining the accounting treatment of the investment.

 

BoC prepares for “Velocity 2”

Kathimerini reports that there have been four red loans sales so far in the Cypriot banking system. Bank of Cyprus has implemented three such transactions, while Hellenic Bank has proceeded with one. The second significant loans sale that Bank of Cyprus is preparing for, is called “Helix 2”. However, before it proceeds with this big transaction, it will move forward with “Velocity 2”. This name was not chosen at random, because it includes unsecuritised loans, mainly from the retail banking sector. Even if the bank has kept this project as a top secret so far, it may proceed with relevant announcements within August. The portfolio that was chosen, will be a repeat – the same profile as the bank’s “velocity” project. Sources report that it includes loans with contract value €200-250m. The article reports that the portfolio will be sold at a low price. Such portfolios, around the world – are being sold for 5-10 cents and this portfolio is not an exception. Besides, it entails high-risk and high-efficiency, since if the buyer manages to recover the debt, they will generate a large profit. Bank of Cyprus’ biggest competitor, Hellenic Bank will also benefit from this transaction. Hellenic Bank owns 50% of APS. Based on the financial results of Bank of Cyprus, they have sold €22m NPLs to CDB Bank in the summer of 2017, they sold €33.7m worth of NPLs to APS in February and proceeded to sell €2.7b red loans to Apollo Global Management (project helix). In total, by the end of the summer, BoC will have sold €2.8b red loans. The one and only other loan sale that has been ever carried out in the Cypriot banking system, was done by Hellenic Bank in the start of 2018, when it sold €145m worth of NPLs to B2Kapital. This means that Cypriot banks sold a total €2.9b NPLs, while with “Velocity 2”, they are expected to reach €3b.

 

Ayia Napa marina promoted as part of Invest Cyprus campaign in South-East Asia

The Cyprus Investment Promotion Agency (Invest Cyprus) recently presented the Ayia Napa marina project to investors and businesspeople in South-East Asia, as part of a campaign to promote Cyprus as an attractive investment destination. Under the general title “Cyprus: The European Gateway to Global Investment”, focusing on the Vietnam, Singapore and Thailand region, Invest Cyprus presented the island’s comparative advantages to a strong audience of businesspeople and managing executives headquartered in these markets. A keen interest was expressed in Cyprus as a destination for investment and opening corporate headquarters.

 

Dispute between the State and companies

Larnaca Mayor Andreas Vyras has called for an immediate resolution of the disputes that have arisen between the state and oil companies, which came to light during the special ministerial committee’s meeting last Monday to discuss the removal of the oil storage facilities from Larnaca. According to Vyras, the Cyprus Ports Authority has said it is incapable of servicing oil company Petrolina with its existing liquid gas facilities in Vasilikos until the company finishes building its new mooring facility; which it said still needs time. The company has denied that there are any disputes, said Vyras, but he added that this situation needed to be clarified the soonest possible as other companies are relying on Petrolina to rent out its facilities too. Vyras confirmed that the Labour Inspection Department has given a negative opinion on the creation of a gas storage terminal in Vasiliko by the VLPG Plant Ltd consortium, adding that there was apparent miscommunication with the state in this case too.

 

Obstacle course for tourism

2020 is also expected to be a difficult year for tourism, according to Deputy Minister of Tourism Savvas Perdios, who said the downward trend in arrivals was expected to continue. In an interview with Kathimerini, Perdios added that revenue from tourism has also reduced, as in an effort to increase market shares in the region, hotels have been offering discounts in their packages. He said the main priority was to boost air connectivity and tap new markets to make Cyprus tourism more extroverted. Decisions will be made by the end of August on how to fill the gap left by the departure of Germania and Cobalt, said the deputy minister, while he called on all stakeholders to contribute to the overall effort to boost tourism.

 

Ayia Napa is one of the most attractive destinations in the Mediterranean

Phileleftheros interviews the president of the Association of Cyprus Travel Agents (ACTA), Victor Mantovani, who among other is asked to comment on the recently reported case of a 19-year-old British tourist being gang-raped in Ayia Napa by 12 Israeli tourists. Mantovani said these were events that fortunately were easily forgotten. He described Ayia Napa as one of the most attractive tourist destinations of the Mediterranean, attracting mainly young people in the months of July and August. But he said a way needed to be found to attract these people back when they are older and have families too. He conceded that there was a lack of policing in the popular resort, which has resulted in drugs such as laughing gas being sold openly on the streets and in clubs.

 

Atelie Demetiades presents the Cyprus Casinos Signage Project

Eurokerdos.com reports that Atelie Demetriades was chosen as the best candidate to create and install the “signage” of Cyprus Casinos in Cyprus. The company was awarded with the project after Cyprus Casinos evaluated samples of each candidate’s work. The samples provided by Atelie Demetriades were excellent and the final result of the projects was perfect, in terms of quality and efficiency on the basis of criteria. It was a really demanding project, both in terms of design, production and installation, and gave the whole team of the company, a chance to showcase their skills. The article reports that Cyprus Casinos is growing to become a top destination for games of chance in Europe. Following the launch of the casinos in Limassol, Nicosia and Larnaca, the Ayia Napa casino will open soon. Furthermore, the Paphos casino is expected to be fully operational by November. The CEO of Atelie Demetriades, Anexandros Demetriades said: “I am grateful for the fact that Cyprus Casinos trusted us to implement their goal. Our goal is to manage and deliver such projects, with the promise that our company maintains the highest standards so as to respond to the client’s aspirations. This is our main philosophy. Besides, the SIGNAGE represents the image of every company”.

 

The State will contribute another €90m for the GHS

The State will contribute a supplementary budget of about €90m for the GHS as it was deemed necessary following calculations of OKYPY’s services. The House Plenum approved the additional budget, to cover expenses and actions that would not be otherwise compensated by any other funding or would not be covered due to insufficient calculations for 2019. This supplementary budget of €90m was necessary for 2019, due to OKYPY not charging & recording their services and it will be repeated in 2020 if OKYPY does not start charging. Within the GHS framework, the HIO will pay OKYPY for their services, for any service recorded and charged, through the HIO’s GHS budget (which is mostly made up of contributions of the state and tax-payers).

 

Economy burdened by the trade in the occupied areas

According to SEK, one issue that requires the government’s immediate attention (as well as by other competent state bodies such as Parliament and the Attorney General), concerns trade in the occupied areas, which in recent years has unfortunately grown significantly. The issue is very serious and concerns SEK, the Cypriot agricultural organizations as well as the Employers and Industrialists Federation (OEB), who submitted an official request to the government requesting a review of the Green Line regulation, as it is unfairl to companies and employees who are legally active in the free areas. According to daily news, Turkish products, of a questionable quality and inadequate checks, arrive with great ease to consumers’ homes. At the same time, taxis, bus and other commercial vehicles are now filling up on fuel from the occupied areas leading the state – among other things – to millions of tax loss. SEK along with other concerned organisations, have formally submitted a request to the state, in order to review the Green line regulation, as it burdens many businesses, and in turn, employees who work legally in the free areas, the consumers and the Government.