The European Bank for Reconstruction and Development (EBRD) has upgraded its forecast for the growth of Cyprus economy in 2016 by 1 percentage point, to 2.7% from 1.7% in May 2016. In its forecasts for November 2016, the Bank also upgrades its forecast for GDP growth in 2017 by 0.2% to 2.2%.
The upgrade of the forecast from the EBRD comes after the upgrade of the forecast of the International Monetary Fund for Cyprus last month, which predicts GDP growth of 2.8% for 2016 and 2.2% for 2017.
In relation to Cyprus, EBRD, notes that growth accelerated in the first half of 2016 to 2.7 percent year-on-year, and consumer confidence has risen sharply, exceeding the EU average in recent months and supporting strong private consumption growth.
The more dynamic economy had positive spillovers on the labour market, as the unemployment rate has begun to fall, reaching 12.0 per cent in mid-2016 compared with the 2014 peak of 16.3 per cent.
Fiscal performance has also been strong, with the fiscal deficit falling to just 1 per cent of GDP in 2015.
Nevertheless, it is noted that general government debt is still high, exceeding 100 per cent of GDP at the end of 2015. Overall growth in 2016 is likely to be around 2.7 per cent, moderating somewhat to 2.2 per cent in 2017, as high levels of public and private debt, and a large overhang of non-performing loans in the banking sector, continue to constrain growth.
EBRD predicts growth of 1.6% in 2016 for its area upgrading by 0.2% its forecast compared with May 2016. It also projects GDP growth of 2.5% in 2017.
Property sales increased by 37% in October 2016, compared to the same month last year, a continuation of the trend of increasing sales mostly since February of the current year.
Sales during the period January-October 2016 recorded an increase of 32% (3,993 last year, 5,278 this year).
This is according to data publicized by the Land Registry, which show that sales documents submitted to the District Land Registry offices reached 634 in October 2016 compared to 463 in October 2015, an increase of 37%. During the previous two months, August and September, the increase in sales had reached 50% and 44% respectively.
By district, the largest increase in sales in October 2016 (63%) was recorded in Limassol. Famagusta follows at 62%, Larnaca 28%, Nicosia 25% and Paphos at 8%.
Limassol also recorded the largest increase (44%) for the period January-October 2016 compared to the same period last year, followed by Famagusta at 33%.Sales to foreign buyers recorded an increase of 45% in October (111 last year, 161 this years), with most sales having been conducted in Limassol, reaching 68. Paphos follows with 43, Larnaca 30, then Nicosia and Famagusta with 10 each
This week the finance minister, Harris Georgiades, told parliament that government income from natural gas could reach €500-€600 million per year in around 12 years time.
As part of the Aphrodite contract, government revenue will start to flow after the energy companies have recouped their costs. This is one reason why Georgiades mentioned 12 years from now, with the hope that production starts in 2020.
Total general government revenue in 2015 was €6.9bn. The gas revenue could therefore add around 10% more to the annual budget. This large increase in revenue is also why the finance minister has sensibly pushed for some hard rules about how the money is spent.
The figures cited by the finance minister prompted a few people to ask me if the number was accurate. The short answer is yes, but only if gas prices rise to a level at which exports to Egypt become viable.
The current LNG spot price (the price if bought today) on the European market is around $4.5 per million British thermal units (mmbtu). Europe is the most likely market for gas sent to Egypt.
This is because, after the massive Zohr find, the country will have more than enough of its own supply. BG (now owned by Shell) is both a partner in Aphrodite and has the idle LNG plant in Idku, therefore using this plant for export will make the most sense.
My own number-crunching, which includes the cost of building a pipeline to Egypt, and then liquefying it at a ready-made LNG plant, suggests that spot prices would have to reach just over $10/mmbtu for exports to Egypt to be viable. For exports by pipeline to Turkey, the viability threshold comes in at a much lower $4/mmbtu.
As an aside, one assumption I make is that 75% of the construction cost of the Idku LNG plant, built in 2001, has been depreciated before production starts. If anyone knows what the industry standard is for depreciation of big industrial works, I would love to hear from them.
An end-market price of $10/mmbtu is pretty close to the figure that energy consultant and fellow commentator, Charles Ellinas, has calculated, using different methods.
It also happens to be the price at which the government would earn about $600m per year in revenues.
In other words, the revenue will only come if gas prices more than double from where they are today. Moreover, with renewable energy prices falling, a doubling of gas prices is currently a long bet.
This year will be the best year as regards tourist arrivals and revenue from tourism in the history of Cyprus, Acting Director General of the Cyprus Tourism Organisation (CTO) Annita Demetriadou has stressed.
Speaking at a press conference on the occasion of the World Tourism Day, celebrated every year on the 27th of September, she said that according to CTO`s estimations, 2016 will be the year during which more than three million tourists will have visited the island, while revenue from tourism is also expected to increase by more than 13.7% compared to last year, surpassing 2.3 billion euro.
"I would like to underline that all months in 2016, for which we have statistical data, have shown an increase, and the eight months (January â€“ August) were the best eight months ever recorded as regards tourist arrivalsâ€, she pointed out.
She also said that the increase in the first eight months of 2016 stands at 19.2% compared to last year, or 2.2 million tourists in real numbers, the Cyprus News Agency reports.
The past four months (May â€“ August 2016) are considered as record months, since they are the most successful ones recorded in the history of tourist arrivals in Cyprus. July 2016 saw the most tourist arrivals.
Demetriadou described as excellent the results of the last winter season (November 2015- March 2016) which showed an increase of 33%.
The CTO is focusing its efforts on attracting tourists from other markets such as Israel, Iran, the Golf countries, even China and India. Its aim is to further improve Cyprus` tourism product and keep prices stable.
Oil rose to its highest since August above $50 a barrel on Monday, supported by a planned production cut by exporter club OPEC, although analysts cautioned the stubbornness of the existing supply overhang could temper a longer-lasting rally.
December Brent crude futures were last up 40 cents at $50.59 a barrel by 1200 GMT, off a session low of $49.74, while U.S. crude futures rose 42 cents to $48.66 a barrel, above the days low at $47.78.
Europes and Asias largest markets, Germany and China, are both shut for public holidays on Monday, limiting trade.
The Organization of the Petroleum Exporting Countries said last week it would cut output to between 32.5 million barrels per day (bpd) and 33.0 million bpd from about 33.5 million bpd, with details to be finalized at its policy meeting in November.
Initial skepticism last week over the effectiveness of the deal in eroding the global surplus gave way to a wave of short-covering that drove the price above $50 a barrel for the first time since late August on Monday.
Aside from doubts over OPEC implementing a final production-cutting deal, those bearish in the market also note the rise in oil output from member countries to a multi-year high in recent months, including exports from Iran that at 2.8 million bpd are close to their 2011 pre-sanctions peak.
OPEC oil output is likely to reach 33.60 million bpd in September from a revised 33.53 million bpd in August, its highest in recent history, a Reuters survey found on Friday.
"Sentiment has been slightly dented by a Reuters survey Friday, showing that despite agreeing to cut production OPEC pumped crude in record amounts through September,Â said Jeffrey Halley, senior market analyst at brokerage OANDA in Singapore.
"OPEC has created its own Q4 risk to oil prices. In raising expectations of a November deal to cut production, it also risks a steep price decline should it fail to achieve its goal of cutting output back to less than 33 million bpd,Â Barclays said in a note to clients.
Despite that, the bank said it did not expect a repeat of the price crash seen late last year after a rally earlier in 2015, citing an improving Asian economic growth outlook, falling oil supplies and rising investor interest in oil markets as support factors.
So, at long last, out of the 12 initially interested international casino operators, we were left with only one! The reason was attributed mainly to the lack of sizeable plots suitable for the purpose, with land owners asking such high prices that they exceeded the cost of the building project. A major blunder was made by our MPs who excluded government land for the purpose, and thus the state has lost out on having a hefty annual rental income, whereas the ever-dynamic Limassol, which always acts as a team, secured the only tender at the Zakaki village area.
The Zakaki plot is located in the wider Phassouri plantation which, set on the western periphery of Limassol, has many advantages, not only because it is part of the wider city boundary, but also by offering good transportation access, an almost direct connection with the motorway, next to the port and to the local My Mall shopping complex, as well as proximate to the local water park and the lovely Ladies Mile beach.
The project, based on the required specifications and subject to the initial announcement by the sole bidder, will include a casino resort which will host a 5-star hotel, a conference hall with a capacity to hold 1,500-2,000 people, as well as restaurants, entertainment areas, and so forth.
Meanwhile, we are informed that it will be the only "Las Vegasâ€ type of casino in Europe, and is expected to create approximately 4,000 new jobs (with all the related services) and which will place the island on the gamblersâ€™ and entertainment-seekersâ€™ map.
The project, taking into consideration the nearby facilities such as the golf course and the houses, of approximately 500 units, to be developed there, together with the water park and related facilities, as well as an attractive wooded environment cannot but be a plus.
The endeavour, which is expected to cost around €0.5 billion, will also create a new "businessâ€ community for Limassol, just as the Russian community and other offshore enterprises already provided for the city. In the meantime, we expect that until the project is developed, estimated to take three to four years, the operator will be allowed to set up a temporary casino, which, we suspect will be at an existing entertainment project in eastern Limassol which is of a large size, open plan and quite attractive. We suspect it is the Monte Caputo night spot.
This Government has bent over backwards to provide all sorts of planning relaxations (given that it has concluded real estate development is one of the two factors that will help the Cyprus economy (the other is tourism). Hence, the casino project is expected to attract, in addition to the ordinary tourists, natives from the main gambling â€˜nationsâ€™, which include Israelis, Greeks and even Chinese, who have shown a positive preference for the island, especially with respect to the visa-passports scheme. To this end, the direct air routes between Cyprus and China, provided by the new Cobalt airline will help. Cruises might also benefit from this venture, albeit not to as great an extent, as well as the Marina projects.
We will then experience a transformation of the area from its present low-cost status to that of up-and-coming private real estate, albeit that it might take a short wait. Well done, Limassol.
A large-scale development which includes stores, offices, apartments, a spa-gym for residents, three pools and parking space will take place on Amathountos Street in Limassol.
Three high-rise apartment buildings will be constructed on the beach front of Limassol, with the height of the buildings reaching 160 meters. Specifically, the development plans three 37-storey towers, with 297 apartments, 10,000 sq. m. of office space, 1,800 sq. m. of stores and 1508 underground and overground parking spaces. The total area the development will cover will be 58,500 sq.m.
The cost of the development is estimated at €150 million, with construction set to begin in January 2017, and is to be completed in seven years.
According to the Flash Estimate compiled by the Statistical Service of Cyprus, the GDP growth rate in real terms during the second quarter of 2016 is positive and is estimated at +2.9% over the corresponding quarter of 2015.
Based on seasonally and working day adjusted data, GDP growth rate in real terms is estimated at +2.7%.
The increase of the GDP growth rate is mainly attributed to the sectors: Hotels and Restaurants, Professional, Scientific and Technical Activities, Retail and Wholesale Trade, Manufacturing, Construction and Transport.
Negative growth rates were recorded by the Financial Service Activities.
SUMMARY OF TAX BENEFITS
The favorable provisions of the Cyprus tax legislation as well as the wide network of double taxation treaties make the Cyprus holding company ideal for international tax planning purposes. The main advantages of the Cyprus tax system are summarized below:
Â· 12.5% uniform corporate tax on trading profits.
Â· Dividend income received from abroad is exempt (subject to conditions).
Â· No thin capitalization rules.
Â· Capital gains from the sale of immovable property situated outside Cyprus is tax exempt.
Â· Taxable losses carried forward indefinitely.
Â· Capital gains on sale of qualified Securities: 100% exemption.
Â· No withholding tax on outward payments (Dividends-Interest-Royalties) to non Cyprus tax residents (companies or individuals).
Â· Foreign Permanent Establishment profits exempt (subject to conditions).
Â· Tax free corporate re-domiciliation permitted.
Â· Possibility for establishing an SE (European Company).
Â· Applicability of all EU directives.
Â· Advance ruling practice exists.
Â· Extensive Double Tax Treaty network.
Just one contender is left in the bid for a casino license in Cyprus, with "NagaCorp Ltd,â€ one of just two remaining interested parties, on Wednesday announcing its steering committee for the purpose would not be participating in the next stage of the bid.
With several big names quitting the competition for various reasons only "Nagaâ€ and "Melco-Hard Rock Resort Cyprus Consortiumâ€ had been left, with the deadline for the submission of their final proposal being October 5.
The "Melcoâ€ consortium is proposing that their casino be developed in land next to the Limassol Mall, while "Nagaâ€ had proposed that their casino is built along the Larnaca-Dhekelia road.
The Melco-Hard Rock Resort Cyprus Consortium is comprised of the companies Melco International Development, Hard Rock International, and the Cypriot company Cyprus Phasouri, part of the CNS Group, which is active in the field of real estate, telecoms, dairy, agriculture, exports and mining. Melco International Development Ltd, which was founded in 1910 and was made part of the Hong Kong Stock Exchange in 1927 is a company with a long history.
Today, Melco is a global investor in the entertainment sector, active in China, the Philippines, Cambodia and Russia. Through the companies Melco Crown Entertainment, Melco Crown Philippines and Summit Ascent, the company owns and operates facilities under the trade names "City of Dreamsâ€, "Studio Cityâ€, "Altiraâ€ and "Tigre de Cristalâ€. In total, these companies own 4,500 hotel rooms, and employ more than 20,000 workers, with $4.8 billion in revenue in 2014. In 2015, the companies had won eight Forbes 5-Star awards.
Top officials from French energy firm TOTAL are expected to visit Cyprus next month ahead of the new round of licensing for offshore exploration in the islandâ€™s Exclusive Economic Zone (EEZ), which is penciled in for next year.
Media reports on Thursday claimed that Cyprus President Nicos Anastasiades and his French counterpart Francois Hollande had discussed the matter of energy during their meeting in Paris on Wednesday while officials of TOTAL had also sat down for talks with French-speaking Foreign Minister Ioannis Kasoulides.
TOTAL and Italian energy giants ENI are currently locked in a battle to secure the rights for Blocks 6 and 10. TOTAL have already claimed the rights for Block 11.
Nicosia is set to begin delivering announcements with regards to the licenses in early 2017 with the hope that drilling will commence in March that same year. Cyprusâ€™ EEZ covers more than 70,000km2 and is divided between 13 exploration blocks.
Cyprus and Israel as part of their wider cooperation have agreed to start their gas explorations with Noble Energy. Cypriot and Israeli governments are discussing to export their natural gas through the shipping of compressed Natural Gas to Greece and then to the rest of Europe or through a subsea Pipelines starting from Israel and then leading to Greece via Cyprus.
There are also plans to transport the gas to Turkey despite the Cyprus problem posing as a major stumbling block. According to the Ministry of Energy, applications in the licensing round may be submitted within 120 days of the date of publication of the notice in the Official Journal of the European Union.
There was a large number of many major institutional investors, attracting more than 100 representatives from various international funds, investment banks and investment consultants that either they are based or maintain a strong presence in New York.
Great interest from investors
High interest was shown by participants in regards to the investment opportunities in Cyprus.
Particular interest was shown by investment funds for the opportunities of non-performing loans, as well as investments in real estate. Also, attendees showed great interest in registering investment funds in Cyprus.
At the same time, during the summit there was a high interest from the attendees to upgrade the agreement between Cyprus and USA to avoid double taxation.
Praises of the Cypriot Economy
The impressive recovery of the Cyprus Economy within a few years as well as the economic reforms implemented gained positive feedback from institutional investors, as it makes Cyprus an attractive investment destination.
A great importance for US investors was the positive feedback on the course of the Cyprus Economy by the representative of the International Monetary Fund in Cyprus, Vincenzo Guzzo, who spoke about a success story in Cyprus, and David Bonanno, CEO of Third Point, one of the largest investment firms in New York and a large investment in Cyprus.
Both Vincenzo Guzzo and the David Bonanno spoke with praise for Cyprus; the later even explained the reasons why Cyprus should be targeted by international investors, adding that Cyprus is a growing international business centre and an attractive tourist destination.
Sentiment in the German economy, the euro area's largest, improved considerably in September and jumped by 3.2 points to 109.5 points, which is the highest value since May 2014, on more optimism among companies, the German Ifo Institute said.
The German economy is expecting a golden autumn, the institute said on Monday in an emailed statement, adding that companies are more satisfied with their current situation.
In industry alone, the business climate rose by 10.8 points in September reflecting "a far more positive outlook for the months ahead, Ifo said, adding that the increase was witnessed in all industrial branches.
The index also rose in the wholesale and retail sectors, after declining in recent months, mainly on better expectations and assessment of the current situation respectively.
In construction, sentiment continued to soar, hitting a new
record high, reflecting an all-time high in assessment of the companies current situation and expectations that it will further improve in the months
The performance of Germany's export-oriented economy is highly important for Cyprus shipping management sector which accounts for 5 per cent of its economy.
According to a study published on Value Penguin, Cyprus is ranked on the 5th place of the safest countries in the world and on the 1st place of the countries with population up to 5 million for the summer of 2015.
Several criteria were taken into consideration, among which are the following:
Â· National police personnel (per 100,000 residents)
Â· Traffic deaths (per 100,000 residents)
Â· Thefts (per 100,000 residents)
Â·Life expectancy (in years).
According to the statement, Cyprus was placed on the 5th position, because of its rankings in policing and low theft levels.
In order to rank the countries, the researchers have used data from reputable and reliable sources.
The Cyprus (EU) Citizenship is granted within just 3 months! The programme has already attracted over 3 billion euros of direct investments into the economy of the Republic of Cyprus. The programme requires the amount of €2mln to be invested in Cyprus for 3 years. Take part in the programme investor with his family obtain Cyprus passports. This is not a residence permit or a visa but rather full citizenship of the EU-member state.
Advantages of the programme:
The programme is unique in Europe and very appealing:
All next generations of investor retain EU citizenship, the investors parents are entitled to apply for citizenship provided that they are owners of a Cyprus permanent residence of at least €500.000 an express procedure that takes 3 months to be approved with No requirement to reside in Cyprus Minimum investment required is €2mln (here and below amounts are excluding VAT where VAT is applicable) The investment must be kept just for 3 years.
Investor and his family can freely reside, work, study, have business in any of the EU-member states as well as in Switzerland, Liechtenstein, Norway and Iceland as Holders of a Cyprus passport can travel visa-free in 157 countries in total Dual-citizenship is permitted.
An investor is free to choose where to invest from a wide choice of options:
Â·Purchase or creation or participation in Cypriot businesses or companies
Â·Investment funds, financial assets of Cypriot businesses or organizations
Â·Government bonds (maximum €500.000 the balance €1,5mln should be invested in other options like property)
Â·Combination of the above options
Cyprus & Turkey should collaborate for the mutual benefit of both, when it comes to Gas Explorations and Distribution
Speaking before a joint sub-committee of
Congress, the US Special Envoy for Energy Affairs at the State Department Amos
Hochstein said that the development of energy reserves in the eastern
Mediterranean has become a top foreign policy priority of the United States.
According to Hochstein for the part of the plan relating to energy security to be implemented there must first be an agreement in relation to the Cyprus problem because the pipeline to Turkey will be passing through the Cyprus EEZ. Energy plans in the eastern Mediterranean place Cyprus at the core of a project of gigantic investments that will change things in terms of security, development and regional welfare. In addition, Turkey is one of the pillars of the Wests political and energy security.
The success of Cyprus third licensing with Exxon Mobil expressing interest, the rekindling of Totals interest, the reconfirmation of ENIs interest and the participation of Qatar Petroleum, despite Qatarâ€™s very close ties and military alliance with Turkey was certainly no accident.
"We expect the Cypriot economy will continue to grow at about 2.5 per cent in real terms in 2017-2019, even though high levels of non-performing loans (mainly loans past due for more than 90 days and forborne loans for a minimum observance period even if they meet the new repayment programme) remain a key concern for financial stability and economic performanceâ€.
S&P said that the positive outlook reflects its view that "we could upgrade Cyprus within the next 12 months if its reduction of currently high levels of non-performing loans accelerates, indicating a convergence of Cyprusâ€™ credit and monetary conditions, including the monetary transmission mechanism, with those of the Eurozoneâ€.
Winter tourism has expanded by 35 per cent over the past 3 years and is relied upon to develop further. The clergyman was at that point looking ahead to 2017 now that this year was wrapping up with an expected 3.1 million record landings.
In the winter of 2015-2016 Cyprus saw around 300,000 voyagers. This implies the degree for further advancement of winter tourism is tremendous, including that a significant part of the system was being engaged there.
"We gauge to end 2016 with nearby 3.1 million landings".
For 2017, there will be more carrier seats, notwithstanding concurrences with the majority of the significant visit administrators in all vacationer markets of premium. "Our endeavors will be increased both in connection to our customary markets, for example, Russia and the UK, additionally in connection to developing markets, for example, Germany, Greece, Israel and Ukraine. "We are additionally intrigued by the Nordic nations where we have lost ground, which we need to recover."
"The expansion of our visitor item will help us to create other tourism markets where we have an irrelevant offer," he included. Talking about longer-term arranges he specified the greens, marinas and the arranged club resort.
Makronisos Marina Ltd, a unit of the construction of a marina in Agia Napa with a capacity of 600 vessels
over a 30,000 square-metre area worth €220m. Construction work, expected to take five years, is scheduled
to begin on September 30, the company said in an emailed statement on Wednesday.
The construction of which will take about three years. A separate tender for the second stage of the construction
works which will include residential and commercial developments, such as "two towers and villas will follow, the
company said. "Construction works are estimated to create 800 jobs by contractors and subcontractors and further 200 persons will be employed to operate the project.
"The ambitious project is expected to offer new dynamism to the local economy and Cyprus tourism product in general.
Source: Sigma Live
ESA and Transport, Communications and Works Ministry signed on July 6, 2016, a five-year European Cooperating State Agreement (ECS/PECS), which allows Cyprus to actively participate in the ESA activities and programs, paving the way for the development of the Cypriot industry, academic and research community, as well as the development of innovative applications with the use of space technologies.
Cyprus with Agency programs and activities and to prepare the country in the most efficient manner for possible
future accession to the ESA Convention.
The total intended envelope of the first call is 1.2 million euro. Such a call will be announced every year for the
whole duration of the agreement.
The ECS Agreement is expected to result in promoting innovation and research, educating at the same time our
young engineers and scientists, creating new jobs and opportunities. "We also believe that will enable our universities and industry to be more competitive and secure additional funds in space applications.
Source: Sigma Live
Since 2013, the government, in close collaboration with CIPA, has set out an ambitious structural reform agenda across the majority of policy areas affecting the business environment in Cyprus.
"We may have climbed 13 places in relation to last year in the World Bank Doing Business report. We have been included in the top ten performers out of the 189 countries. We may have officially exited a macroeconomic adjustment program last March.
The investment funds legislation and achieved a tripling of funds under management from €1 billion to €3 billion since 2013.
"Our vision is to provide the Cyprus economy with the necessary attributes that will make it flexible and adaptable to the ever-changing international scene and the growing needs of investors. By doing the best we can to develop and strengthen our competitive and comparative advantages, while implementing, alongside the government, bold structural reforms, we believe that Cyprus can and will be transformed.
Source: Sigma Live
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