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Tuesday, February 27, 2024

There are two main axes of development of the CSE, says Marinos Christodoulidis

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Note that there are good companies in Cyprus, such as pharmaceutical companies, hospitals, universities, ports, marinas, casinos, etc. that could be listed on the CSE

Δύο οι κ yριοι Αξονες αναπτυξης του ΧΑΚ, λe&epsilon

The two main axes for the development of the stock exchange institution in Cyprus, which is the denationalization of the Stock Exchange through the attraction of a well-known stock exchange abroad, as a major shareholder, but also the granting of tax incentives to companies to be listed on the CSE and to investors to invest, he emphasizes in an interview with KYPE, the President of the Cyprus Stock Exchange (CSE) Marinos Christodoulidis.

At the same time, Mr. Christodoulidis emphasizes the pursuit of the Stock Exchange Board to simultaneously list the international government bonds (EMTNs) that are currently listed on the London Stock Exchange alone, with a value of over €10 billion, on the CSE, but also to carry out the Ministry and in a first domestic issue of government bonds to be listed only on the Cyprus Stock Exchange.

Furthermore, he emphasizes that the CSE, in cooperation with its partners, has the infrastructure to fully take over the operation of the competitive electricity market, if called upon, and in particular after the electrical interconnection of Cyprus with other markets.

“All the actions that are being taken are to have a valuable stock exchange in Cyprus, which will attract good companies and serve them by raising the necessary funds for their development, but also the economy more broadly”, he emphasizes and underlines that “the state must realize that it is not possible for an economically strong country not to have a strong stock market, which is widely known to be the mirror of a country's economy”.

In particular, in his interview with KYPE, the Chairman of the Council of the CSE said that the Cyprus Stock Exchange needs new companies to attract the interest of the investing public and added that “to achieve this, tax incentives are needed”. For this reason, the CSE has already sent recommendations, as he said, to the Ministry of Finance, as well as to the competent Committee of the University of Cyprus, which is working on the tax reform, on behalf of the Ministry.

Stating that by attracting new companies to the CSE, investors will also come, Mr. Christodoulidis noted that “there are good companies in Cyprus”, such as pharmaceutical companies, hospitals, universities, ports, marinas, casinos, etc. that could be listed on the CSE.

He stated that in a recent meeting with the Minister of Finance and the Director General of the Ministry, he emphasized that “it is good for the Republic of Cyprus as well as for the CSE, every time the state proceeds with a privatization, whether through its procedures it licenses new large projects, to encourage companies to list their shares on the stock exchange of the country in which they make such a large investment”.

He added that “one of the serious and good reasons for the Ministry of Finance to do this is for transparency, as for a listed company there are transparent procedures that it should follow”. Additionally, Cypriot investors will be given the opportunity to easily participate in these major investments.

“The main reason why companies do not show interest in being listed on the CSE is the lack of marketability” he noted and added that investors report, during their contacts with the CSE, that “although they have capital to invest, they either cannot find companies for investment either they are limited, or there is not sufficient marketability to be able, at any time, to purchase or sell shares”.

The President of the CSE said that the solution to this issue which is promoted by the Stock Exchange's Board of Directors, “is not one-dimensional but multi-dimensional” and explained that in the legislation for the privatization of the CSE, “there is a basic criterion for the buyer that it should be a recognized foreign exchange of known value”.

“When this stock exchange invests as a major shareholder, it will bring know-how and new products to the CSE and at the same time offer the assurance to investors that there will now be increased marketability on our stock exchange”, he underlined.

The privatization, however, according to Mr. Christodoulidis, “it is not a panacea as tax incentives should also be given to some companies and investors, to restart the stock market”.

Introduction to the CSE government bonds

In addition, Mr. Christodoulidis said that the implementation of the agreement made in 2021 with the Swiss depository (SIX SIS) to facilitate cross-border transactions is being completed and added that the main objective of this agreement is “in the first stage, the Cypriot bonds of the Republic (EMTN's), worth more than €10 billion, which are listed on the London Stock Exchange, to be listed on the CSE at the same time”.

“When this parallel introduction takes place, it will be much easier for Cypriot investors to trade in government bonds.” “This is a very important step both for increasing the capitalization of the CSE and for its marketability”, he underlined.

With this, according to the President of the CSE, “on the one hand, we help the Republic of Cyprus to have its bonds listed in its country – I do not know of any other country in the world that does not have its bonds listed on its stock exchange – and on the other hand, it will significantly increase the capitalization of the stock market”.

He stated that on this issue, the Ministry of Finance is expected to soon submit an application for listing the government bonds on the CSE and added that after the application is submitted, the bonds will be traded on the CSE in a very short period of time, alongside the their trading on the London stock exchange.

He also said that for the CSE it would be desirable for the Ministry to proceed with a first domestic issue of government bonds which would only be listed on the Cyprus Stock Exchange and added that this would be good for the Ministry of Finance to have domestic borrowing as well – no only borrowing from abroad – as for the Cyprus Stock Exchange. The CSE, in collaboration with market participants (CSE Members) submitted a relevant proposal to the Ministry of Finance with its recommendations for this purpose.

Energy Exchange – Competitive electricity market


Mr. Christodoulidis told KYPE that since 2019 the CSE is a founding shareholder with a percentage of 10% in the Greek Energy Exchange, also participating in the Board of Directors of this Exchange, adding that “as the CSE we have been ready for a long time, as soon as the competitive electricity market in the Cyprus, to respond with the clearing of transactions and the monetary settlement of the transactions of this market”. For this purpose, he added, the CSE has entered into a special agreement with the Cyprus Transmission System Operator (TSO) and is already ready with its own infrastructure.

He also said that the CSE together with its partners are also ready, when the Cyprus-Crete electricity interconnection is completed, “to take over, if called upon, the operation of the competitive electricity market, in accordance with the proposal we submitted in 2019”.

“The Stock Exchange with his partners have the infrastructure to serve in the future through the PCR algorithm and the electrical interconnection of Cyprus with other European markets”, he underlined.

Source: www.kathimerini.com.cy

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