Cyprus Business Now

Credit rating agency Fitch Ratings this week upgraded Hellenic Bank’s long-term Issuer Default Rating (IDR) to ‘BBB-‘ from ‘BB+’, with a stable outlook, and its Viability Rating (VR) to ‘bbb-‘ from ‘bb+’.

In an announcement released on Tuesday, Fitch stated that this upgrade primarily reflects the recent upgrade of Cyprus’ economic rating to BBB+/positive and the improved assessment of the Cypriot operational environment.

According to Fitch, the upgrade of Cyprus’ economy was driven by the reduction in private sector debt and the expectation of continued economic growth.

These factors, the agency explained, support the long-term sustainability of Cypriot banks’ business models and reflect improvements in the fundamental metrics of the banking sector.

The upgrade also reflects Hellenic Bank’s ongoing record of healthy profitability, resulting in capital accumulation, consistent asset quality following the completion of legacy exposure clean-up, and low-cost deposit-based funding.

Cyprus’ decision on investing in the Great Sea Interconnector project will hinder whether the cost-benefit analysis is approved, it was reported on Wednesday.

Speaking to CyBC in the morning, Energy Minister George Papanastasiou said the final decision on investment in the project will be made by the end of the summer.

He said the Energy Regulatory Authority (Cera) decided on Tuesday not to impose any financial burden on Cypriot consumers before the completion of the project.

The decision, he added, may be in favour of the consumer, but it is likely to cause problems in relation to the project.

Papanastasiou said that the first reaction from the European Commission is that there may be difficulties in the sustainability of the project following Cera’s decision.

Italian energy giant Eni is considering on divesting from specific projects, including Cyprus, with Nicosia on Wednesday saying they have so far received no information on the matter.

According to a report in Bloomberg, who cited unnamed sources, Eni is planning to divest more than $4 billion in upstream assets, with Indonesia and Cyprus among the project potentially being targeted.

Invited to comment on the report by the Cyprus News Agency (CNA), Energy Minister George Papanastasiou said on Wednesday that Nicosia has no information on the matter.

“So far we haven’t received any information from that company,” he said.

However, the Italian giant had made known the tactic of divestment and reduction of capital expenditure (Capex).

The Transport Ministry on Wednesday said that passenger numbers at Larnaca and Paphos airports rose to 1,300,041 visitors during June, reflecting a 5.04 per cent increase compared to the previous year.

“Passenger traffic for the first half of the year has outperformed previous historical records, approaching 5.1 million passengers,” the ministry added in an official statement.

This positive trend was evident at both Larnaca and Paphos airports, with Larnaca experiencing a robust 6 per cent increase, while Paphos saw a more modest rise of 2.99 per cent.

Similarly, flight operations followed this upward trend, with aircraft traffic expanding by 4.2 per cent to reach 9,347 flights compared to the previous year.

These figures are supported by the latest figures from Hermes Airports, which manages both the Larnaca and Paphos international airports.

The Cyprus Consumers Association this week issued advice to consumers regarding their shopping during the sales period, saying that there is a need for careful planning and awareness to maximise the benefits of the available discounts.

The association said that the rising cost of living is forcing consumers to adjust their spending habits, limiting non-essential expenses, reducing impulse purchases, and planning their shopping decisions in an effort to better manage their disposable income.

However, as July is the month when most stores offer discounts, the association advised consumers to be particularly cautious and take into account the following tips to better prepare and make the most of the opportunities the market offers during this period.

Firstly, consumers are urged to conduct market research now and set a budget for their purchases in advance.

“Identify products that may interest you and note their prices, so you can more easily gauge the actual discount rate when announced,” the association said, as the goal is to purchase items not typically offered at discounted rates during the rest of the year.

The Cyprus Stock Exchange (CSE) ended Wednesday, July 3 with minor profits.

The general Cyprus Stock Market Index was at 162.99 points at 12:37 during the day, reflecting an increase of 0.15 per cent over the previous day of trading.

The FTSE / CySE 20 Index was at 99.15 points, representing a rise of 0.15 per cent.

The total value of transactions came up to €149,491, until the aforementioned time during trading.

In terms of the sub-indexes, the main, alternative and hotel indexes rose by 0.02 per cent, 0.26 per cent and 2.08 per cent respectively. The investment firm index fell by 0.43 per cent.

The biggest investment interest was attracted by Hellenic Bank (-0.38 per cent), the Bank of Cyprus (+1.97 per cent), Demetra Holdings (-0.44 per cent), the Cyprus Cement Company (no change), and Lordos Hotels (+3.9 per cent).