Daily Press Review - 5/2/2020

Shareholder arm wrestling at the banks

There have been a lot of changes to the Cypriot banks’ share capital structure since the beginning of the year. There have been substantive changes at Bank of Cyprus (BoC) and Hellenic Bank (HB), each for different reasons. At BoC, investment firms and companies have been increasing their stakes, while at HB there has been an increase in the Cypriot element. The most recent change was the purchase of 1.2 million shares by Logicom, which increased its stake by 1.42%. Demetra is the bank’s biggest shareholder with 21%. Logicom has a 29.6% stake in Demetra, which means its indirect participation in HB through Demetra is 29.2% of 21%, which equals 6.22%. So, if the 1.42% is added to that, Logicom really has a 7.64% stake in HB. But more changes are expected at HB in July, when it has its AGM and the bank’s Board of Directors will be reshuffled anew. The balance at the bank had already changed last summer, with Demetra taking at a seat on the Board, along with Pimco. There was a lot of criticism against Wargaming, HB’s second largest shareholder, with claims that its participation in the Board was only focused on voicing its own demands. Kathimerini newspaper learns that there have been many changes to HB’s Board and for the first time in years, there is polyphony. So, there are rumours that there will be changes in July and there could possibly be a reduction of Wargaming’s representatives on the Board. For the time being, as it has been leaked, there is good communication within the Board and Wargaming is not operating in a way that cancels out the demands of the rest of the Board’s members and shareholders. It is noted that Wargaming has a 20.2% stake, Pimco 17.3%, Third Point 12.6%, ETYK provident fund 6.3% and Senvest 5.1%. At BoC, there were two big changes since the beginning of the year. Caius Capital increased its shares to 1.44%, and along with its CFD products, increased its stake to 5.65%. At the same time, Morgan Stanley & Co International Plc purchased shares and acquired a 5.31% stake in BoC. Thus, the bank acquired two new major shareholders.

 

Bank employees invest in their employers

Bank employees’ union ETYK is increasing its investment in the banks, through its provident fund and to a lesser extent, its members’ health fund. Following ETYK’s participation last summer in Hellenic Bank’s share capital increase with a 6.26% stake, the union’s provident fund participated last week in the capital issue by AstroBank, gaining a 5% stake for €40m. AstroBank is also expected to issue a bond soon in a bid to raise another €40m, which will go towards its acquisition of National Bank of Greece (Cyprus). According to leaked information, ETYK intends to participate in the bond issue too. The aim of ETYK’s strategy to invest in the banking system is to ensure long-term participation in the banks’ boards of directors. The bank employees’ provident fund was also left exposed during the bail-in in 2013. ETYK’s provident fund currently holds 25.85 million HB shares, which it paid €22.6m for. This made it the bank’s fifth biggest shareholder, after Demetra, Wargaming, Pimco and Third Point.

 

Governor at the House – Today for banks’ charges, tomorrow for PEPs

Central Bank Governor Constantinos Herodotou will be at the House today and tomorrow, to discuss two hot topics: the excessive charges of the banks and the NPLs of politically exposed persons (PEPs). Today, the House Institutions Committee will look at the excessive charges imposed by the banks, especially on pensioners and other vulnerable population groups. Brief reminds that at last November’s meeting on the matter, Herodotou had said that the CBC is the competent authority for laying out regulations and supervising the adequacy of the procedures followed by the banks, but it cannot investigate specific consumer complaints. He added that the CBC cannot intervene over the interest rates or charges imposed by the banks; though he pointed out that the law allows the Finance Minister to intervene if it considers vulnerable population groups are being charged excessively. Besides the governor, the Committee has also invited representatives of the Finance Ministry, Consumer Protection Service, Commerce Ministry, the Financial Ombudsman, the Chairwoman of the Commission on the Protection of Competition, the Banks’ Association, Alpha Bank Cyprus, Ancoria Bank, Eurobank Cyprus, RCB Bank, Hellenic Bank and Bank of Cyprus, as well as unions PEO, SEK and DEOK.

 

X-ray of “Co-operators”

The infamous “Georghadji list” of PEPs’ NPLs is just one part of the whole issue that was raised by the Attorney-general himself last March, following the announcement of the findings of the inquiry into the collapse of the Cyprus Co-op. He referred to 91 loan contracts by MPs with a balance of €13m, of which 36 were classified as NPLs for the total sum of €9.48m. As such, the Audit Office is currently carrying out an investigation targeting 154 current and former Presidents, ministers and MPs over loans held at the former Co-op. This is all connected to the probe that is underway over the NPLs belonging to PEPs, which initially concerned state asset management KEDIPES, but then also Hellenic Bank, after relevant restrictions were lifted. However, Politis has learned that even though KEDIPES has complied with the majority of what the Audit Office has requested, by yesterday, it had not yet sent data that had been requested on loans that were written off for PEPs. It is noted that the aim of the probe is not just to determine whether the PEPs have NPLs, but also to see what collateral was given (or not) and whether they received favourable treatment.

 

New reduction of the CCLEI in December, but at a slower rate

The Cyprus Composite Leading Economic Index (CCLEI) dropped an annual 2.8% in December, following a drop of 3.5% in November and 4.0% in October, suggesting a sluggish, albeit modest, economy in the short term. The negative CCLEI rate, which receded 110.6 units, is mainly due to external pressure, which is reflected in the index through the annual reduction of the Eurozone’s Economic Climate Index as well as the annual increase in oil prices, according to a press release by Hellenic Bank, which prepares the index in cooperation with the University of Cyprus.

 

 

Hellenic: 178 ΑΤΜs that redefine self-service

With the new state of affairs in the banking system, as well as the integration of the Co-op’s network of ATMs with Hellenic Bank’s, the latter now operates the biggest ATM network in Cyprus. From early 2019, HB has invested in new technologies and all of its     ATMs are state of the art. The aim is to meet the modern needs of its customers, through continuous technological upgrades and readjustments to meet future needs. HB now runs 178 ATMs island-wide, redefining the meaning of Self-Service, and combining technological advancements with the human-centric experience.

 

Hellenic Bank – Allianz GI: Forum on the future of investments

A forum entitled: “Defending your Kingdom: Sustainable Investment strategies for uncertain times”, which was organised by HB in cooperation with Allianz Global Investors, looked at alternative options to manage cash and the new face of investments. The forum was the first of its kind, following the launch of the strategic cooperation between HB and Allianz GI in November 2019. HB is now the exclusive distributor of Allianz GI’s investment products in Cyprus, providing clients with access to a broad range of actively managed mutual funds and investment products of varying risk and classification worldwide.

 

Hellenic Bank seeking to recruit staff – Details of the vacancies

Hellenic Bank is seeking to recruit staff: a Business Analyst, a Business Analyst (Card Services) and a Software Engineer (iOS Developer). All applications will be reviewed and assessed and only the shortlisted candidates will be contacted for an interview. Applicants who have submitted an application to Hellenic Bank in the past and meet the requirements of the above position must fill a new application. Deadline for submitting applications: 11th of February 2020.

 

CCCI: Meeting to discuss challenges and opportunities from Brexit

The Cyprus Chamber of Commerce and Industry is organising a broad meeting for the island’s business community, to address and record the challenges as well as opportunities arising from Brexit, with the aim of coming up with specific proposals to submit to the government.

 

Revenue of € 151.57 million

In response to questions raised by AKEL’s members of the House committee, Minister of Transport Yiannis Karousos forwarded to the House information on the port industry showing that state total revenue from the Limassol port’s private investors amounts to €151.57 million euro, not including the amount relating to investments that have been made or will be made by the investors. At the same time, freight traffic has also increased. Based on Minister Karousos’ response to AKEL’s members of the House committee, on the Cyprus Port Authority’s budget, port privatization limited the Cyprus Port’s Authority’s total revenue without rendering it unprofitable, while it increased turnover at the port of Larnaca. According to the data, revenue in 2019 was significantly higher compared to 2017. In 2019 total revenue was 54.6 million euros from 46.5 million euros in 2018 and 37.9 million euros in 2017 (revenues in 2017 involved 11 months of port operation as the private port investors took over the port on 29/01/2017). As regards freight handling, it increased to 328,622 in 2019 from 210,056 in 2017, the total cargo increased to 188,841 tonnes in 2019 from 75,197 tonnes in 2017. During 2019 a total of 1,801 vessels were served from 1,035 in 2017. As for the other ports, plans are as follows: Larnaca Port. The Ministry is in the process of negotiating with a private investor the development and management of the port and the Larnaca Marina. In case of a positive outcome, there will be a transition period of 9-12 months during which the administrator will need to secure the necessary licenses. Vassilikos Port. There is a cabinet decision for proceeding with an expansion plan for a new industrial port that will serve energy support companies as well as companies that might want to move from the port of Larnaca. Based on the Minister’s response, the Cyprus Port Authority has assigned to Deloitte the preparation of a competitiveness study. Based on the study, seven specific non - adjustable charges were examined, which were obtained from the published rates of tariffs applied since March 2017, compared to the charges that were in force during the same time in other ports. The study was conducted between 10/5/2017 and 28/7/2017 and does not include certain changes to specific rates. At this stage, an open competition is underway for the purchase of consulting services that will examine all port charges and will determine the charges that need modification. The article includes a table that indicates the total state revenue by operator (Eurogate, P&O, DP World Limassol) from 2016 until the first quarter of 2020.

 

The numbers do not add up

In a letter to the paper, the author claims that he read and re-read the statements made by the Deputy Minister of Shipping, Natasa Pilidou, a few weeks ago regarding the passenger fare for the ferry connection from Cyprus to Greece, indicating that it would be about € 130 for return trip including port charges. On the other hand, according to the author, he read and re-read the new DP World directory of charges from 1 February 2020 for service passengers and he is lost about the cost and wonders whether the said fare is either for one way from Limassol port (not Piraeus port) or free of port charges.

 

Reorganization of the Port Authority

The introduction of private operators for the Limassol port has converted the Cyprus Port Authority from a service provider to a controlling authority.  Based on the response by the Minister of Transport, Yiannis Karousos, the Cyprus Port Authority commissioned PwC for a study on the Authority’s new role and organizational structure required. The necessary number of employees based on the new the organizational structure of the Authority has been defined to be 192 employees. Over 140 positions are filled and the remaining are vacant. Some posts have already been filled and some are in the process. Taking into consideration that the filling of these positions is considered necessary for the effective implementation of the new organization chart, the Authority will re-apply to the Ministry of Finance with the aim un freezing these positions. As regards the new qualifications and skills for the positions in the new organizational structure, they relate to the fields of environmental, security studies, health studies, protection of maritime port areas, law, economics, finance diplomas or master. Finally, if they succeed with the selection of a private investor for the Larnaca port and marina, then a new plan for voluntary retirement will be announced by the Cyprus Port Authority.

 

 

 

Drillings in Cyprus EEZ to begin

New drilling in the Cyprus EEZ at the end of March – beginning of April was announced yesterday by the government while reaffirming that Cyprus’ energy program is proceeding normally. The government spokesman said that the drilling rig is expected to arrive in Cyprus for the new drilling by the consortium ENI-Total upon completion of the works in Egypt and Lebanon. At the same time, the government places a lot of significance on the visit to Cyprus by US Assistant Secretary of State for Energy Resources, Francis Fannon that send a lot of powerful political messages. A crowding of warships are observed in the basin of the Eastern Mediterranean from six countries, in particular Greece, USA, France, Turkey, Egypt, Egypt and Russia, which shows the great interest in energy fields

in the Cyprus EEZ and geopolitical balances in the region.

 

Three Best Western hotels

The well-known hotel franchise Best Western has taken an important towards the implementation of its plans, following the public presentation of the environmental impact study for the two hotels that will be built, Best Western Zenon and Best Western Marina. The first hotel will be built at a street close to Zenon Kitieos street, and the second will be built at the Makarios Avenue, close to the marina. The public presentation of the environmental impact study will be held on 18 February 2020, at the Radisson Blue hotel. Best Western Zenon, and the Best Western Marina will essentially be serviced apartments, but will operate as hotels. In the meantime, the first Best Western serviced apartments unit will open on 1 April in Oroklini at the premises of the Destalo hotel.

 

Elements Capital Management acquires Londa Beach Hotel

The beachside Limassol hotel, Londa Beach Hotel was acquired by Elements Capital Management, after it paid off the company’s debt to Gordian Holdings. The price of the transaction was not announced. Moreover, the Fund hasn’t announced yet what they intend to do with the hotel. Kathimerini reports that the hotel will remain open as normal.

 

Macau shuts down its casinos

Macau, the world’s biggest gambling hub, said on Tuesday it had asked all casino operators to suspend operations for two weeks to help curb the spread of the new coronavirus. Macau’s chief executive Ho Iat Seng said that the casinos will initially close for two weeks, but noted that their closure may be extended if the virus keeps spreading. Seng said it was a difficult decision, but one that needed to be taken for the health of Macau’s residents. He also added that he would meet with the representatives of the gaming industry. The only other time that Macau shut down its casinos was in 2018, when the city was affected by a strong hurricane.

 

Xi Jinping admits responsibility

Chinese President Xi Jinping said that the battle against the outbreak of the new coronavirus is a hugely important challenge for the Chinese system and the country’s government, as the number of patients and fatalities has increased significantly in China. At the same time, Jinping accepted a part of the responsibility for the spread of the virus and warned that anyone who doesn’t implement the government’s decisions will be punished. Kathimerini’s article also reports that the UK called on its citizens to leave Chine, while Macau has decided to shut down the casinos for two weeks.

 

Casinos underestimated the impact of Internet use

Last week, the Hellenic Gaming Commission (EEEP) shut down the Rio and Alexandroupoli casinos for the next two months on Thursday due to debts to the Single Social Security Entity (EFKA). According to the author, this has showed the fact that the casino market in Greece is struggling. It seems that over the next few months, shell-companies will be created in Greece, with hundreds of unpaid employees who will end up being unemployed and tens of millions of euros of debt in to the Social Security Funds and the State, and possibly to third parties. This blurry environment was the creation of many factors. Primarily, the companies underestimated the impact of the Internet and its online services. In fact, people got up from the tables and turned their attention to their phones, only in about 5-10 years. Increased internet usage came at the same time as the financial crisis. Greek people lost almost 25% of their income in the next 4-5 years, making Greek people’s visit to the casinos more expensive and rarer. This negative situation was intensified by the privatisation of OPAP, which made it a far more attractive option for Greeks, as it was assigned new games and rights by the Greek government. The fact that the former state business was taken up by a dynamic and effective player, was another unpredictable development that affected the casino businesses. As such, OPAP managed to adjust better than the casinos. At the advent of the crisis, the casinos lost over 2/3 of their gross profits, dropping to €253m in 2017 from €777m in 2007.

 

Cancer: a joint European venture

In an opinion article by EU Commissioner for Health and Food Safety Stella Kyriakides, she argues that new cases of cancer are being diagnosed daily in Europe. On a daily basis, patients, their families and their friends suffer from all the emotions brought on by a cancer diagnosis, such as uncertainty about the future, shock, grief, rage or even despair. Cancer is a serious health issue that directly affects 40% of EU citizens at some point in their lives. In Cyprus, more than 1200 lives are lost every year due to cancer. If we do not take any action, the total number of cancer cases in the EU is expected to double by 2035. If we do not reverse this worrying trend, the burden of cancer on our families, our health and social systems and economy will continue to rise. She underlines that as a Health Commissioner, beating cancer and reducing its impact is of utmost importance to her.

 

Hellish A&E Limassol and Paphos

Yesterday morning, 25 patients were waiting to be admitted to the A&E department of the Limassol General Hospital from the previous night. Some patients were receiving treatment in chairs, while others withheld hospital beds despite the continuous arrival of new patients. The staff had to use the rooms for short hospitalisations as well as the room especially designed to handle a suspected coronavirus case. During lunch, the number of patients waiting to be admitted dropped to 18. The Paphos A&E also had 8 patients waiting during lunch, while 2 of those people were waiting to be admitted since last week. The situation at the Nicosia A&E is also difficult, but the staff consider it to be bearable. The Larnaca A&E did not show to have any special trouble yesterday. The A&E doesn’t look like an A&E anymore, and the staff is desperate as they don’t know what else to do to help patients. It’s an issue of staff shortages and lack of organisation.

 

1 out of 4 persons underwent blood tests

The GHS software recorded a total 1,608,393 visits to doctors during the first seven months of the system’s implementation. The number of patient referrals for lab works showed a reduction, following the measures and restrictions placed by the Health Insurance Organisation (HIO) in November, but, according to HIO’s data the percentages remain increased and specifically, 26.92% of visits involved referrals to blood tests. In simpler terms, 1 out of 4 persons had blood tests done. Phileleftheros’ article includes a table showing the exact numbers of visits to doctors, referrals for blood tests, referrals for diagnostics, visits with referral for each month.

 

Record visits in January

The flu outbreak and season infections are most likely the reason behind the increase in number of beneficiaries who visited their GP in January, compared to previous months. More specifically, 246,457 visits were recorded in January, of which 123,852 (50.25%) were given a medicine prescription, 49,174 (19.95%) placed an order for lab tests, 91,230 (37.02%) were referred to a specialty doctor and 15,727 (6.38%) were referred to lab tests. January recorded the most visits to GPs since the implementation of the GHS. Compared to December, January recorded another 13,614 visits.

 

A Cyprus-wide shortage of Calpol since October

The most common antipyretic medicine for infants, toddlers and children, known to all as Calpol, has been on shortage for the past four months from all pharmacies across Cyprus. Officially, the local representative and distributor of the medicine in Cyprus, has not talked about the reasons for the shortage, although reports suggest that stockpiles of the product in question appear to be depleted due to Brexit, since the manufacturer is a British company. The President of the Pharmaceutical Association Eleni Piera Isseyiek confirmed that this medicine is on shortage since October, clarifying that it’s not the pharmacists’ fault.

 

IQOS store at Mall of Cyprus awarded

Cassandra Trading Ltd received an important award for its IQOS store at the Mall of Cyprus. It received the bronze award in the “Model stores” category across Cyprus. The company imports and distributes Philip Morris International’s tobacco products in Cyprus. The award ceremony was held on 22 January 2020 at Hilton Park Nicosia, and aimed to highlight the best practices and innovative actions in the Cyprus retail of products and services.

 

Many smokers think e-cigs will help them stop smoking, study suggests

According to a new European study, the people who vape on a daily basis are more likely to have been smokers recently. The study suggests that the use of e-cigarettes is common among the smokers who have recently stopped smoking, but it is rarely used among those who have stopped smoking for a long time. The data shows that a lot of today’s smokers who want to stop, are using e-cigarettes as an aid.