Building permits up 32% in first 10 months of 2017

The area of construction projects that secured a building permit in January to October last year rose an annual 35 per cent, to 1,129,084 square meters, while their value rose 38 per cent, to €1.3bn, the statistical service said.

The increase was mainly on a 32 per cent annual increase in the construction area of housing projects, to 875,565 square meters, and a 33 per cent rise in their value, to €904m, Cystat said in a statement on its website on Monday.

The permits provide for the construction of 1,949 new detached houses, 26 per cent more compared to January to October 2016, Cystat said. The number of semi-detached houses to be built rose 23 per cent, to 640, and that of residential apartment blocks 82 per cent, to 1,089.

The building permit data shows that the construction area of licenced non-housing projects rose 31 per cent in the first 10 months of 2017, to 217,670 square meters, compared to the respective period of 2016, while their value rose 19 per cent, to €220,766.

Civil engineering projects that received a building permit in January to October rose in terms of construction area 637 per cent, to 35,849 square meters, Cystat said. Their value rose 532 per cent to €102m.

Building permits are a significant economic indicator.

Source: CyprusMail

Cyprus, Israel falling behind Egypt in energy prospects

In the East Med, 2017 was a year during which Israel and Cyprus said a lot but achieved little, while Egypt said less but achieved most.

2017 was a good year for Egypt. It secured a $12 billion loan from the IMF, which led to floatation of the Egyptian pound, adoption of an energy sector reform programme – including liberalisation of the gas industry – and subsidy reductions. These reforms have already benefited the energy sector. Gas production has increased, with the giant 30 trillion cubic feet (tcf) Zohr gas-field becoming operational in December 2017 and already helping to reduce LNG imports by 30 per cent. The first phase of Zohr will be completed during the first half of 2018, adding over 10 billion cubic metres (bcm)/yr to the Egyptian gas grid, rising to about 28 bcm/yr by 2019.

With a number of other, smaller gas-fields, being developed over the same period, Egypt expects to become self-sufficient in gas by the end of 2018, allowing it to phase-out liquified natural gas (LNG) imports and resume LNG exports in the 2019-2020s. This is good news for the country but bad news for Israel and Cyprus that nurture hopes of exporting gas to Egypt.

These developments will make 2018 an even better year for Egypt’s energy sector. Increasing investments, attracted by the reforms and high gas prices, will lead to increased exploration and production activities and more discoveries. EGAS is planning to issue global tenders in 2018 for new Red Sea and western Mediterranean concessions.

In addition, with a new ambitious target to achieve 42 per cent of electricity generation from renewable sources by 2025, including hydro, and with a phase-out of subsidies and higher energy prices starting to impact consumption and bringing it under control, 2018 will be a turning point for Egypt.

The greatest challenge in 2018 will be to implement fully the new gas law and deregulation by completing liberalisation of Egypt’s gas industry, with the potential of creating a freer, more flexible and more efficient gas market. This should support Egypt’s hub aspirations and help attract more investment in a sector that is so crucial to Egypt’s economy.

In contrast, Israel’s sole success in 2017 was to achieve a final investment decision (FID) for Phase 1A of Leviathan, aiming to achieve production by the end of 2019. But even this has its own risks. The deal with the Jordanian National Electric Company (NEPCO), to supply 3 bcm/yr gas over 15 years, is still subject to political risks with resistance to it in Jordan, including from the parliament, still strong. This has been exacerbated by the escalating Turkey-Israel tension following the US announcement to recognise Jerusalem as the capital of Israel. In addition, most of the secured gas sales agreements are to independent power producers still to be realised.

The lack of export routes and perceived regulatory risks have also affected a successful conclusion to Israel’s first offshore licensing round, launched at the end of 2016, with no participation by major international oil companies. Out of 24 tendered, five blocks were awarded to Energean and one to a group of Indian oil companies led by ONGC. Israel may launch another offshore licensing round in 2018, but unless conditions change it may not fair any better.

Phase 2 of Leviathan depends on securing exports and firm gas sales deals through exports to Turkey, Egypt and Europe. All these options face major political and commercial challenges. Even though a gas pipeline framework deal looked likely to be signed with Turkey, this is now unlikely to happen soon and 2018 will probably prove disappointing for this project. In addition, for commercial reasons, the EastMed gas pipeline to Europe may prove to be a pipedream rather than a pipeline, despite framework agreements signed between Israel, Cyprus, Greece and Italy and support by the European Commission, unless of course it receives a substantial subsidy from the EU. Gas exports to Egypt face commercial and also political challenges.

However, with low prices undercutting Leviathan gas, the development of Tanin and Karish gas-fields in Israel by Energean should achieve FID and proceed successfully to construction in 2018.

Lebanon’s first offshore licensing round produced results with a consortium of Eni, Total and Novatek being awarded blocks 4 and 9. The challenge in 2018 will be the promising block 9 which includes an area disputed by Israel.

Cyprus’ third offshore round was concluded successfully early 2017, with three blocks awarded to Eni, ExxonMobil/Qatar Petroleum and Total. But that was the only success in 2017. Aphrodite gas-field, discovered in 2011, is still looking for buyers for its gas and even though a new drilling round started in 2017, Total’s first well in block 11 turned out to be a dud.

Another disappointing outcome was that the Cyprus problem negotiations collapsed in July 2017 without agreement, despite two years of discussions. Continuation is unclear and will have to wait conclusion of the presidential elections in a few weeks’ time.

However, based on promising results from the assessment of seismic data, drilling started end of December by Eni in block 6. Eni’s plan is to immediately continue drilling in block 3 in 2018. In addition, ExxonMobil may have better chances of success when it drills in block 10 during the second half of 2018. By the end of 2018 Cyprus should know what quantities of gas exist in its licensed blocks. But this will not be without its challenges. Turkey will continue harassment of drilling activities and may increase the ante by drilling in Cyprus EEZ.

But finding gas in the East Med may prove to be easier than selling it. Exporting gas outside the region is still challenged by persistently low global gas prices, expected to stay low for the longer-term as global energy supply continues to outpace demand. The future for East Med gas exports may be through integrated projects to minimise costs, and LNG, and even then it will be challenging.

However, Cyprus should also consider other options, than just exports to utilise its gas. Such options could enable development of Aphrodite to supply gas to the island, and support petrochemical and power generation projects, rather than rely on importing LNG which may prove to be costly. This would require a major change of current thinking that may prove to be a challenge too far in 2018.

Source: CyprusMail

BOC Asset Management launches first mutual fund

Bank of Cyprus (BOC), the island’s largest lender, said that its BOC Asset Management (BOCAM) unit launched operations on December 1, with the introduction of a mutual fund. The BOC European Equity Fund of Funds aims to generate high yields in the long run with the management of investment in mutual funds investing in Europe, mainly through capital gains but also with income, Bank of Cyprus said in an emailed statement on Friday.
BOCAM will actively manage the investment of BOC European Equity Fund of Funds via a thorough and strict selection procedure of mutual investment funds investing in securities, mainly in European capital markets.
The bank added that mutual investment funds are an investment option for both institutional and private investors, are highly regulated and considered an effective asset management tool offering investors ‘considerable advantages’.
These advantages include professional investment and portfolio management, immediate liquidity, optimisation of the return-to-risk ratio via wide diversification, relatively low transaction costs, absence of minimum participation requirements, transparency via the daily publication of prices and yields and the daily publication of the net value of the investment, BoC said.
BOCAM is the first Cypriot mutual fund management company approved by both the European Central Bank and the Cyprus Securities and Exchange Committee (CySEC), the bank added.

Source: CyprusMail

EIB signed new loan agreements with CCB and Hellenic Bank

The European Investment Bank (EIB) signed yesterday with Hellenic Bank and the Cyprus Cooperative Bank (CCB) two new loan agreements of €40 million and €25 million respectively aiming to provide Cypriot small and medium sized enterprises (SMEs) and Mid-caps with financing on favourable terms.

The loans, granted under the EIB;s Scheme for supporting SMEs and Midpas in Cyprus, are granted with state guarantees, which cover part of the EIB’s credit risk, resulting in cheaper funding.

Both the Cypriot Finance Minister Harris Georgiades and EIB Director, Annita Fuerstenberg praised the scheme as having positive impact to the real economy.

Under the scheme, Georgiades said, in a period of three years, a total of 269 loans have been given to small and medium sized enterprises promoting 340 new investments amounting to €440 million. He added that the scheme contributed to the creation of 821 jobs and contributed to the island’s GDP by 0.28% and by 0.46% in 2015 and 2016 respectively.

“With such moves an economy can go forward, with the private sector as the main actor opening new avenues through entrepreneurship, with a facilitating banking sector, the supporting role of the state and a significant European institution, in this case the EIB, offering its own decisive banking,” he said.

On her part, Fuerstenberg said that in 2017 the EIB has signed in Cyprus €333 million of new loans and disbursed over €260 million both in the private and the public sector, “demonstrating the EIB’s commitment to the Cypriot people.”

These numbers, she added, make Cyprus “the most benefited EIB share holder in terms of its GDP.”

Nicolas Hadjiyiannis, the CCB’s CEO, said under the scheme the bank granted in 2017 116 loans to SMEs amounting to €25 million with an average of €215,000 per loan.

Ioannis Matsis, CEO of Hellenic Bank, said the continued support by the EIB confirms the bank’s confidence to the Cypriot economy “proving we are on the right track.”

During the ceremony, an assessment, commissioned by the EIB, on the effectiveness of the bank’s Scheme was presented. The scheme began in 2014.

The results, Fuerstenberg said, show that “the EIB’s contribution has significant positive impact on the growth rate of the Cyprus economy.”

“The EIB was able to help the private sector during a period when access to lending was particularly challenging even for the larger and the best-established Cypriot enterprises,” Fuerstenberg said.

According to the study, total investment facilitated by the scheme amounted to €443.9 million, of which €410.3 million for new investments and €33.6 million for working capital, while loans under the scheme amounted to €290.5 million as at April 2 2017.

The scheme, the study showed, facilitated approximately 29.8% of total new investments in the economy over the period of 2015-2016 whilst it provided for 16.9% of total new investment in Cyprus.
“Overall, it is estimated that the Scheme has contributed positively to the growth of 2015 and 2016 and continues to contribute to the growth of 2017,” the study said.

Source: Stockwatch

The biggest casino-resort in Europe to operate in Cyprus by 2021

“City of Dreams Mediterranean”, an integrated casino resort, considered to be the one of its kind in Europe will be operational by 2021, generating an annual contribution of €700 million to the Cypriot economy, Joint Venture ICRC said on Tuesday.
The joint venture, Integrated Casino Resorts Cyprus (ICRC), composed of Melco Resorts & Entertainment (“Melco”) and The Cyprus Phassouri (Zakaki) Limited (member of the CNS Group) presented the finalised plan on Cyprus’ first integrated casino resort during an event held at the presidential palace.
The project is expected to be completed by 2021 and will cost €550 million.
Addressing the ceremony, President of the Republic Nicos Anastasiades said that the casino resort “due to its size justifiably is included among the biggest projects in our country.”
Anastasiades said the project fully secures the government’s aims, mainly the setting of the highest standards to protect vulnerable groups from gambling, the improvement and enrichment of Cyprus’ tourism product, as well as the reduction of its seasonal nature, while generating fiscal revenue supporting the industries associated with the casino and to create new jobs and attract investments.
“Our aim was to create an integrated casino-resort which would be the best in Europe and one of the best in the world,” he added.
Yiorgos Lakkotrypis, Minister of Energy, Commerce, Industry and Tourism said the project will constitute the biggest investment ever made in Cyprus.
Lawrence Ho, Chairman and Chief Executive Officer of Melco, said with City of Dreams Mediterranean, Meclo is expanding its flagship brand name outside Asia for the first time, adding that the project in Cyprus is a top priority for the giant casino operator.
According a press release issued by Melco, Ho said in statement that Cyprus’s first Integrated Resort which “will place Cyprus on the world tourism map and attract visitors, not just from the surrounding region but also from the whole of Europe and around the world.”
According to the ICRC, the €550 million project is expected to create around 4,000 jobs annually during the construction period and will eventually contribute in the creation of approximately 6,500 direct, indirect and induced full-time jobs in Cyprus when the resort is fully operational.
City of Dreams Mediterranean will be developed in western Limassol, and is expected to be launched by early 2021. The Integrated Resort is designed in the Mediterranean style, and will be built according to the principles of sustainable development and be tailored to fit Cyprus’s natural environment and landscape. It will be Europe’s biggest Integrated Casino Resort, with gaming areas of a total of 136 tables and 1,200 gaming machines, a five-star hotel with luxurious villas and 500 hotel rooms, 11 restaurants and cafeterias, a wellness centre, a sports centre, an extensive pool area with river woods and surf pools, a high-end retail area and an outdoor amphitheatre with extensive green areas. Also, in order to attract conference tourism, City of Dreams Mediterranean will offer 9,600-sq. metres of MICE facilities with a convention expo centre.
By the first half of 2018, a temporary casino will operate in Limassol until the casino resort is completed. The project also includes the operation of four satellite casinos in Nicosia, Larnaca, the Free Famagusta Area and Paphos.

Source: Stockwatch

EIB to grant loans of €65m to Cyprus Cooperative Bank and Hellenic Bank

The European Investment Bank (EIB) will sign new loan agreements with the Cyprus Cooperative Bank and Hellenic Bank amounting to €25 million and €40 million respectively.

The loan agreements, under state guarantees, aimed at financing small and medium-sized enterprises(SMEs) and mid-cap companies in Cyprus at attractive interest rates.

According to a press release issued today by the Ministry of Finance, the signing ceremony will take place next Wednesday at the Ministry of Finance in the presence of the EIB Director for Central and Southeastern Europe Anita Furstenberg and Finance Minister Harris Georgiades.

The results of the evaluation study of the implementation of the Scheme for granting government guarantees to EIB for financing SMEs and Mid-Caps in Cyprus will also be presented at the ceremony. 


Source: Stockwatch

Property transactions up 36% in January

The number of property transactions in December rose an annual 36 per cent to 1,537, the highest number reported since July 2008, the department of lands and surveys said.

The increase in property transactions in December, ahead of the introduction of 19 per cent value added tax (VAT) rate on land plots in January, was mainly on an annual 113 per cent increase to 306 of the number of properties sold to new owners in Nicosia, the department said. Most transactions took place again in Limassol and their number rose 23 per cent to 532.

In Paphos, property transactions rose 10 per cent to 349, in Larnaca 18 per cent to 181 and in the Famagusta district 94 per cent to 169, the department said.

Throughout 2017, the number of transactions rose island-wide 24 per cent to 8,734, which is again the highest figure since 2008, the department said.

The number of real estate assets acquired by new buyers rose 42 per cent last year to 1,464 in Nicosia, 27 per cent to 3,167 in Limassol, 44 per cent to 628 in Famagusta and 23 per cent to 2,135 in Paphos, the land department said. In Larnaca, they fell 1 per cent to 1,340.

The above figures also include properties acquired by banks as part of loan restructuring agreements. In September 2015 to April 2017, the total number of properties affected by loan restructurings was 1,121 island-wide and its value was €575.7m, according to the department.

Source: Cyprusmail

Economic sentiment indicator deteriorated in December

The Economic Sentiment Indicator in Cyprus deteriorated as the Economic Sentiment Indicator (ESI-CypERC) decreased in December 2017 by 3.4 points compared with November 2017 declining to 118.9 units.

However, the ESI remains at historic high levels, according to the date of the University of Cyprus’ Economic Research Centre (ERC).

The decline resulted from the worsening of business confidence in services and the construction industry, and the weakening of consumer confidence, while the services confidence indicator declined due to firms’ less optimistic views on recent business situation and downward revisions in turnover expectations, the ERC said.

On the contrary, the Retail Trade Confidence Indicator rose as a result of improved assessments of recent sales and current stock volumes, and upward revisions in sales expectations.

The Construction Confidence Indicator decreased marginally due to downward revisions in employment expectations, whereas the Industry Confidence Indicator remained unchanged as firms’ more pessimistic assessments of current orders and future production plans were offset by improved assessments of their stocks of finished products.

According to the ERC, the Consumer Confidence Indicator decreased as a result of consumers’ less favourable responses regarding their future financial conditions and the future economic conditions in Cyprus, including labour market conditions.

Source: Stockwatch

Cyprus to table coordinates of the remaining of its EEZ

The Republic of Cyprus is taking all the necessary steps to table the coordinates relating to the rest of its Exclusive Economic Zone (EEZ), for which the said coordinates have not been tabled, Foreign Minister Ioannis Kasoulides has said, adding that the decision to do so will be taken, taking into account Turkey’s provocations.

Speaking to CNA, the Minister also said that there is a contradiction in Ankara’s positions with regard to Cyprus’ EEZ, in that it does not recognize Nicosia’s right to have an EEZ and yet it says that it is acting to serve the interests of the Turkish Cypriots in an EEZ, which it claims it does not exist.

On this week’s official visit by President Nicos Anastasiades to Saudi Arabia in relation to the Cyprus problem, Kasoulides said King Salman is moving in the framework defined by international law and order and UN resolutions, adding that Turkey no longer has an easy ride within the Organisation of Islamic Cooperation.

Invited to comment on criticism from the opposition of remarks by President Anastasiades about EEZ in connection with the Turkish Cypriots, Kasoulides noted that the Foreign Ministry is working very hard to exercise, whenever it is called to do so, the right of the Republic of Cyprus to table coordinates for the whole of Cyprus.”

This, he said, has been the policy of the current government, and consequently there can be no doubt as to President Anastasiades’ policy and position on the matter of Cyprus’ EEZ.

The President, replying to press questions, said earlier this week that Turkey must understand that the drilling, currently underway, concerns the future of Cyprus and its people, all of its people. Consequently, he said, “questioning our sovereign rights, simply because Turkey does not recognize the Republic of Cyprus or because it believes that the self-styled regime in occupied Cyprus actually exists, has no actual standing.”
If Turkey chooses to protect the rights of the Turkish Cypriots in a separate independent entity, then it has to limit this protection to the rights of this illegal entity and therefore it has no reason to question Cyprus’ sovereign rights, he added. This, however, is a theory that concerns only Turkey, not Cyprus, Anastasiades stressed.

In his statements to CNA, the Minister said that in addition to this, there is a contradiction in Turkey’s positions and this must be highlighted.

“On the one hand Ankara refuses to recognize Nicosia’s right to have an EEZ and claims that the Republic’s EEZ belongs either to Turkey or Egypt and on the other Turkey says it is acting to serve the interests of the Turkish Cypriots in an EEZ which it claims does not exist. This is a contradiction in terms,” he said.

Turkey, whose troops invaded and occupy Cyprus’ northern part since 1974, does not recognize the Republic of Cyprus, in spite of repeated calls by the international community to do so. The Turkish Cypriots declared a UDI in the occupied areas. The UN has called on all states not to recognize or facilitate this regime, and described the UDI as “legally invalid.”

Replying to a question about the position of the international community on the issue of Cyprus’ EEZ, he noted that the Law of the Sea convention defines clearly how relations between states are governed as far as each nation’s EEZ is concerned.

He recalled that Turkey has not signed the convention and recently was the only state that voted against the obligations of states in this regard.

“It is obvious to everybody that Turkey is acting in an arbitrary manner, by virtue of its strength in the region,” Kasoulides said, adding that once a state tables the coordinates at the UN, either through an agreement with another state bordering the median line or in another manner, things proceed.

Things with regard to the rest of Cyprus’ EEZ must start at some point, whether Turkey agrees or not, he said.
Asked about action taken towards this direction, the Minister referred to various moves already made in the past several months, in consultation with Greece, in that the issue concerns Athens too.

“As I have already stated, we have not relinquished our right to table the coordinates of the rest of our EEZ, for which we have not done so to date. Preparations are in their final stages and our decision on the timing of this move will be taken depending on Turkish provocation, in particular with regard to the new drilling rig Ankara has bought and which it threatens to use,” Kasoulides told CNA.

The Minister was also asked to comment on the significance and the outcome of the visit to Saudi Arabia and noted that it was very successful and the targets set with regard to enhancing bilateral ties have been met.

Saudi Arabia, he explained, is a leading nation in the Arab and the Moslem world and regional developments have brought about a shift in the objectives and ambitions of the countries of this region.

One of these, he continued, is the cooperation among all moderate states which share similar thinking regarding the fight against terrorism. Saudi Arabia is also facing threats, just as other states in the region do, he added. 

“I am sure that our regional policy has not gone unnoticed by Saudi Arabia. Hence its initiative to invite the President of the Republic for an official visit. This is an historic move, as far as we are concerned,” the Minister pointed out.

He recalled that Saudi Arabia had established an embassy in Cyprus in the early 1960s, after Cyprus gained its independence from British colonial rule, but closed it following intercommunal fighting in 1963. For years, on the Cyprus problem Riyadh was following policies in consultation with Turkey, he noted.

“Things have changed. In 2015 SA’s Ambassador to Greece was also accredited to Cyprus and we opened an embassy in Riyadh. We have assurances that there will be more upgrading in this regard but I do not wish to elaborate further on the matter,” he said.

The path for cooperation in the economic, energy, transport and tourism is wide open, he said, recalling that the competent Cypriot Ministers who accompanied the President on his visit met in Riyadh with their Saudi Arabian counterparts and the results of these encounters will begin to emerge soon.

This marks progress in bilateral relations, as seen with regard to Cyprus’ ties with Egypt, Jordan and Israel, he said.
Replying to another question about Riyadh’s position on the Cyprus question and efforts to find a negotiated settlement, he said that there has been a change in the position Saudi Arabia adopts at the Organisation of Islamic Cooperation.

“Turkey no longer has an easy ride within the Organisation. Many countries have opposed Turkish designs, as expressed in the Organisation, with Egypt and the UAE leading the way,” the Minister added.

In this respect, he explained, the limits within which they operate is “respect of international law and order and UN resolutions and this is the position King Salman has outlined to us in Riyadh.”

“It does not look as if they would be taking a stance on the Cyprus problem. Nonetheless, this is the framework within which they will operate,” he concluded.

Source: Stockwatch

Saudi Aramco shows interest to do business in Cypriot EEZ

Saudi Arabian oil company Saudi Aramco has expressed interest to do business in Cyprus’ Exclusive Economic Zone, according to a PIO press release.
It is noted that on the sidelines of President Anastasiades’ official visit to Saudi Arabia, Energy Minister George Lakkotrypis held contacts with officials of the Saudi Ministries of Energy and Tourism as well as with officials of Saudi Aramco, a worldwide giant on oil.
According to PIO, during the meeting , the Saudi Aramco representatives expressed interest to do business in Cyprus' EEZ, mainly because of the stability of Cyprus as an EU member state as well as its geology and perspectives as an energy centre. The two sides agreed to continue the dialogue and explore the most appropriate ways to cooperate.

At the meeting with top ranking officials of the Saudi Energy Ministry both sides expressed will for closer contacts between Cypriot and Saudi businessmen.

At the meeting with Tourism Ministry officials, both sides expressed will to further develop relations between the two countries on this sector.



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