Republic of Cyprus
Federation of Euro-Asian Stock Exchanges
44
Economic Development
Cyprus enjoyed its forth consecutive year of growth in 2018, outperforming most of the euro area. The Cypriot economy was one of the fastest growing in the euro area in 2018. Annualized GDP grew at 3.8%, mainly led by private consumption and gross fixed capital formation. All sectors of economic activity, except financial and insurance activities, continued to expand in terms of their real gross value added. The construction, arts and entertainment as well as professional services were the fastest-growing sectors. Service exports were particularly strong, as Cyprus experienced a record-high tourism season. The Cypriot economy remains dependent on demand from the UK and Russia, in particular in tourism and business services. Economic growth helped to increase the labour force and boost employment.
All sectors of economic activity, except financial and insurance activities, continued to expand in terms of their real gross value added. The construction, arts and entertainment as well as professional services were the fastest-growing sectors. Growth in the largest sector of the economy, namely trade, transportation, accommodation and food services, remained above GDP growth in the third quarter, but softened compared to the first half of 2018. For the year as a whole, GDP growth is estimated at 3,8% compared with 4,2% in 2017 and 4,8% in 2016. The small slowdown in GDP was expected after its strong corrective rebound in the previous two years. According to the Labour Force Survey (LFS), the strong economic activity resulted in a reduction in the unemployment rate. The unemployment rate declined to 7.8% from 11% the previous year, demonstrating the strength in the recovery of the labour market. The inflation rate, reaching 0.8% and remained below expected levels, inter alia, due to increased competition and lower prices of imported goods
.Positive economic conditions and fiscal consolidation contributed to favourable financial market terms, and the funding costs for the Cypriot government declined further. Cyprus was actively involved in lowering its interest payments and smoothing its maturity profile further. The strong economic performance bettered Cyprus’ weak credit profile in 2018, reflected in positive outlooks from the rating agencies. Looking forward, any further upgrade will depend on additional improvements in the banking sector, continued solid economic growth, a reduction in the current account deficit, and a decline in the government debt burden. Cyprus has achieved a solid recovery over the past few years.
To boost economic resilience, the country needs to consolidate public finances by further reducing public debt and counteracting the concentration of economic activities by diversifying from the tourism and construction sectors. Despite successive reforms, Cyprus must regain reform momentum to enhance the efficiency of the public sector and judiciary, while supporting fiscal sustainability. The high level of NPLs remains a key vulnerability for banks, which suggests the need for a reform of the insolvency and foreclosure framework, and poses a risk for the economy going forward.
Corporate Actions
The CSE executes by automated methods all corporate actions which affect uniformly the entire registry (i.e. split, reverse split, rights distribution and securities bonus distributions), according to the Issuer’s instructions. For the corporate actions that issuers must submit an electronic registry according to the Cyprus Stock Exchange Regulation the responsibility lies to the Issuer. The timeframe depends on the type of corporate event.