investment

Cyprus banks: interest rate policies harming borrowers and savers

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Cyprus banks: interest rate policies harming borrowers and savers

By December 2023, interest rates on Cyprus bank loans for house purchases had reached an average of 5.1%, compared with the average rate of 3.8% for other euro area countries. The average interest rate on Cyprus bank loans to corporations was 5.7% in December 2023, exceeding the euro area average of 5.1%. Cyprus banks had increased their profits by 600% to over €1.1 billion in 2023. The interest income of the two largest banks increased by €830 million between 2022 and 2023, mainly due to higher interest receipts from the ECB. Cyprus banks deposited around 35% of their assets at the ECB, earning from 2% to 4% in interest in 2023. Cyprus banks offered an average interest rate of 2.06% on fixed term deposits in January 2024, compared with an average deposit rate of 3.21% in the euro area. The net interest margins for Cyprus banks exceeded three percentage points, while the average for the euro area was just over one percentage point. The Bank of Cyprus announced that €112 million of their after-tax profit of €487 million would be distributed as cash dividends to shareholders, with a share buyback of up to €25 million.

Stellantis buys stake in optical radar start-up SteerLight

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Stellantis buys stake in optical radar start-up SteerLight

European carmaker Stellantis is acquiring a stake in optical radar startup SteerLight to strengthen its market position and secure access to crucial sensors for autonomous driving. This move aims to diversify the supply of lidar and speed up the development of components for its future electric fleet. Stellantis, the producer of Fiat, Peugeot, and Citroen cars, made the investment through Stellantis Ventures, though the amount was not disclosed. SteerLight, originating from France’s CEA-Leti in Grenoble, claims its lidar solutions are more compact and less expensive than competitors’. The company emphasizes that its system has no moving parts, making it robust and compact, which provides flexibility for vehicle engineers and addresses the challenges of component size and high cost in current lidar technology. Additionally, SteerLight has welcomed two other investors, Quantonation fund and Italian venture fund Liftt.

Economic outlook remains favourable says ratings agency

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Economic outlook remains favourable says ratings agency

Morningstar DBRS rated Cyprus at a BBB (high) long-term credit rating with a stable trend, highlighting the balance between favourable economic prospects and downside risks. Cyprus recorded a real GDP growth rate of 2.5% in 2023, above the Euro area’s average of 0.4%, and reduced its debt-to-GDP ratio to 77.4% by the end of 2023. The rating is supported by a stable political environment, sound fiscal and economic policies, and a favourable government debt profile. The economic outlook for Cyprus is positive, with expectations of growth in private consumption, employment, and investment activity, partly due to Next Generation EU funds and major projects in tourism and real estate. The Central Bank of Cyprus projects real GDP growth to reach 2.6% in 2024 and 3.1% in 2025. However, risks include potential escalations in the Ukraine conflict and trade disruptions in the Red Sea.

Micron eyes record high as AI demand powers strong forecast

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Micron eyes record high as AI demand powers strong forecast

Micron Technology’s stock surged 18% earlier this week and was set to open at a record high due to a strong revenue forecast, driven by high demand for AI hardware. Other chip firms like Western Digital, Advanced Micro Devices, and Broadcom also saw their stocks rise. Micron announced that its high-bandwidth memory (HBM) chips, crucial for AI development, are sold out for 2024, with most of its 2025 supply already allocated. The company, a supplier to Nvidia along with South Korea’s SK Hynix, is expected to add nearly billion to its market value. Micron’s shares have increased over 60% in the past 12 months, with expectations of growing its share in the HBM market. The company’s forecast for adjusted gross margin is above market estimates, attributed to the tight supply and high demand for HBM chips.

Clip News creates A.I. tools for its media analysis services

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Clip News creates A.I. tools for its media analysis services

Clip News, a company with over 30 years of experience in Monitoring and Media Analysis, has created its own artificial intelligence (A.I.) tools for analyzing media data based on Greek language models, marking a first in Greece. This development is the result of a collaboration with Aristotle University of Thessaloniki’s (AUTh) Intelligent Systems Lab of the Informatics Department (IS Lab), on a project titled “Intelligent analysis of Media Text Data”. The new A.I. tools will provide high prediction accuracy rates for sentiment analysis, emotion recognition, hate speech, and irony detection in media data, both online and offline. They also feature capabilities for data tagging and clustering, with real-time system response and continuous data processing. The system’s algorithms were trained using hundreds of thousands of media data from various sources, processed by specialized analysts at Clip News. The project, which began early in 2022, also aims to offer the A.I. community large-text language models in Greek. The research program has resulted in the publication of scientific articles by the IS Lab team. This initiative is part of the ESPA’s “Innovation Investment Schemes” of the operational program “Central Macedonia 2014-2020”.

Cyprus tourism should , ‘respect both visitors and resources’, tourism minister says

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Cyprus tourism should , ‘respect both visitors and resources’, tourism minister says

Deputy Minister of Tourism Kostas Koumis emphasized that a sustainable destination respects both its visitors and its resources, both natural and human. He made this statement during his participation at the annual tourism conference organized by the Association of Cyprus Tourist Enterprises (Stek), which was held in Nicosia. The theme of this year’s event was ‘Tourism: New Realities Demand a More Competitive Model’. Koumis highlighted the importance of tourism to the economies of Cyprus and Greece, noting that tourism contributed 12.8 percent to the GDP of Cyprus this year. He mentioned the recognition of the value of tourism on a pan-European level after 2000, especially during the pandemic, and the discussions about creating a common tourism portfolio to address challenges faced by various destinations. Koumis also discussed the need to address reduced air connectivity during winter, the threat of climate change, and the issue of seasonality in Southern European countries’ tourism sector. He proposed initiatives for European citizens to visit destinations within the union during low-visitor months with European funds and mentioned collaboration with the Ministry of Labour to improve vocational training schemes. Koumis stressed the need to improve air connectivity, enhance Cyprus’ tourism product during winter, and the importance of digital transformation in the tourism industry. Myron Flouris, Secretary-General for Tourism Policy and Development at the Greek Ministry of Tourism, discussed the impact of natural disasters on Greece and the importance of planning and prevention for resilience in tourism. Alexandros Thanos, an advisor for the Greek Tourism Confederation, highlighted the significant contribution of tourism to Greece’s GDP and the imbalance in revenue levels among the country’s regions. Stek president Akis Vavlitis emphasized the strong influence of seasonality on Cypriot tourism and called for strategic planning and expedited procedures for the arrival of workers from third countries. The discussion also covered the risks of climate change for the tourism product of countries like Greece and Cyprus and the need for tourism businesses to focus on the human factor and offer authentic experiences.

BoE must cut rates at next meeting, says deVere CEO

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BoE must cut rates at next meeting, says deVere CEO

The Bank of England left interest rates unchanged at 5.25%, a 16-year high, on Thursday. Critics and financial experts, including Nigel Green, CEO of the deVere Group, are calling for the central bank to reduce rates at their next opportunity to alleviate financial strains on businesses and households, enhance business profitability, make homeownership more accessible, boost consumer confidence and spending, and stimulate economic growth. Lower interest rates are also seen as beneficial for investors, as they tend to increase demand for risk assets like equities. Green argues that proactive rate cuts are essential to prevent economic downturns and mitigate recession risks, despite concerns that such actions could fuel inflation. He emphasizes that the Bank of England has the tools and expertise to manage inflation effectively while supporting growth through rate adjustments.

Cyprus banks to maintain stability, but lower profits, says Moody, ’s

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Cyprus banks to maintain stability, but lower profits, says Moody, ’s

– Risks associated with loans for Cypriot banks are expected to decrease due to economic growth, declining inflation, and unemployment rates.
– Moody’s predicts a decline in bank profits from recent highs.
– A gradual decrease in net interest margins is anticipated due to rising deposit costs and falling interest rates, influenced by competition and high levels of private sector debt.
– Stricter loan criteria and loan restructuring efforts are improving loan quality and reducing problematic loans.
– Asset quality risks from foreclosed properties are diminishing, supported by a strong real estate market.
– The banking sector in Cyprus is characterized by a low loan-to-deposit ratio and ample liquidity reserves.
– Cyprus’ GDP is forecasted to grow by 2.8% in 2024 and 3.2% in 2025-27, outpacing the euro area by 0.8% in 2024.
– Economic growth is supported by diversification in the services sector and significant foreign direct investment projects.
– Moderate growth in the loan portfolio is expected due to the banking system’s saturation, high private sector debt, and elevated interest rates.
– Monetary policy is expected to remain restrictive, even with interest rate reductions by the European Central Bank.
– The NPE ratio is expected to decrease below 3% this year.
– The proportion of foreclosed assets relative to bank equity is decreasing, supported by the real estate market.
– Capital risks are declining, with banks completing risk release and balance sheet restructuring.
– The Common Equity Tier 1 ratio for assessed banks increased to 18.8% at the end of 2023.
– Moody’s assessment focuses on Cyprus’ two largest domestic banks, Bank of Cyprus and Hellenic Bank, which represent a significant portion of the banking system’s assets.
– The weighted average Baseline Credit Assessment of the two major banks is ba2, with a weighted average asset-based deposit rating of Baa3.

‘, A very big and increasing presence of Israeli businesses in Cyprus’

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‘, A very big and increasing presence of Israeli businesses in Cyprus’

The Israel Tax Authority (ITA) is investigating Israeli assets in Cyprus due to the increasing presence of Israeli businesses on the island. Cyprus’ finance ministry and accounting associations acknowledge this growth. Finance ministry spokesperson Michalis Papadopoulos stated that the ITA’s operation is a result of the increased presence of Israeli nationals in Cyprus but clarified that Cyprus is not directly involved in the operation. The head of the accountants’ association, Nikos Chimarides, mentioned the significant presence of Israeli businesses in sectors like fintech, investment, real estate, and foreign exchange trading in Cyprus and noted that these businesses do pay their taxes in Cyprus. However, he also highlighted the absence of a double tax treaty between Cyprus and Israel, which has been a longstanding issue. The ITA’s operation is part of a wider campaign against tax evasion and the black economy in Israel. The investigation involves analyzing travel patterns of businesspeople between Cyprus and Italy, examining offshore companies linked to Israelis, and leveraging information sharing agreements with several countries. It is estimated that between 10,000 to 20,000 Israelis reside in Cyprus.

Goldman Sachs digital asset head says crypto rally driven by retail investors

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Goldman Sachs digital asset head says crypto rally driven by retail investors

The recent surge in cryptocurrency prices has been driven primarily by retail investors, with institutions beginning to participate, according to Goldman Sachs’ head of digital assets, Mathew McDermott. Bitcoin reached an all-time high of ,794 last week and has seen a 50% increase this year. Goldman Sachs launched a crypto trading desk in 2021 and has observed a significant change in client types and trading volumes this year. Analysts suggest that the influx of funds into US spot bitcoin ETFs, which launched this year, may be contributing to bitcoin’s gains. The cryptocurrency market experienced a boom during 2020 and 2021, driven by low interest rates, but faced a downturn in 2022 following a series of bankruptcies among major crypto firms, leading to a trillion loss in market value. McDermott mentioned Goldman Sachs’ interest in bankruptcy claims and investment opportunities in the crypto sector. Despite the volatility and risks associated with bitcoin, there is interest in the blockchain technology behind cryptocurrencies for trading assets other than cryptocurrencies. McDermott anticipates that more asset classes will be tokenized in the future, potentially gaining scale within one or two years.