Cyprus Business Now: weekly wrap-up
Here are the top business stories in Cyprus from the week starting October 14:
Rising interest rates, which have resulted in increased borrowing costs, have weighed heavily on mortgage demand in Cyprus. According to Delfi Partners’ analysis, which examined data from the first three quarters of the last four years, demand for housing loans has been impacted by the European Central Bank’s (ECB) interest rate hikes aimed at curbing inflation.
Furthermore, fluctuations in Euribor—a critical benchmark for Cyprus’ mortgage rates—have significantly influenced the volume of mortgaged properties as rates have continued to rise over the past four years.
In contrast to the challenges faced in the mortgage market, Cyprus’ potential as a prime investment destination received a notable boost last week. The inauguration of two major manufacturing facilities, the Olympus dairy plant in Nicosia and the Kassatly beverage factory in Limassol, has reinforced the country’s economic resilience.
The Cyprus Chamber of Commerce and Industry (Keve) views these developments as essential for job creation, local production, and export opportunities, enhancing Cyprus’ competitiveness. According to Keve, the establishment of these plants demonstrates the country’s appeal as an investment hub, particularly in sectors such as food and beverage, with advanced technology and high production standards playing a pivotal role in their growth.
On the digital front, the Deputy Ministry of Research, Innovation and Digital Policy has announced a significant partnership with UAE’s Khazna, the largest data centre operator in the region. A Memorandum of Understanding (MoU) was signed during an official visit to Dubai by Deputy Minister Nicodemos Damianou, marking a new chapter in Cyprus’ ambitions to position itself as a key player in the global digital landscape. This partnership will facilitate joint projects, leveraging Cyprus’ strategic location as a data gateway for businesses seeking to secure access to European markets.
As Cyprus continues to explore new opportunities across various sectors, the maritime industry will take centre stage at the fourth annual Thalassa Festival in Limassol. The festival, which highlights the blue economy’s impact on Cyprus, will bring together maritime experts and local institutions to raise awareness of the critical role shipping and ports play in the country’s economy.
Deputy Minister of Shipping Marina Hadjimanolis, alongside Limassol Mayor Yiannis Armeftis, emphasized the festival’s significance in promoting maritime and shipping professions, particularly among young people, who are the future of this growing sector.
While the maritime industry is being showcased, another area making headlines is the effort to increase female representation in Science, Technology, Engineering, and Mathematics (STEM). The inaugural Women in STEM Cyprus Forum, held on Ada Lovelace Day, called for systemic reforms to empower women in these fields.
Co-organised by Women in Tech Cyprus and TechIsland, the forum brought together leaders from various sectors to propose tangible strategies for increasing female participation in STEM. This event, which was attended by students, professionals, and policymakers, marked a significant step towards gender equality in these critical industries.
In the realm of tourism and hospitality, Hong Kong investor Balram Chainrai has submitted a proposal to acquire the majority share capital of Agros Development Company “Proodos” Public Ltd, owner of the Rodon hotel in Agros.
Should his acquisition go forward, it will not be Chainrai’s first investment in Cyprus. His plans for the Rodon hotel include significant renovations, aimed at transforming the venue into an exclusive destination for winter tourism, further solidifying his presence in Cyprus’ hotel industry.
At the same time, the Cyprus Borrowers Association (Syprodat) has expressed strong criticism of the government’s recent actions concerning inflation measures.
In a recent statement, Syprodat highlighted the contradictions in the government’s approach, questioning its decision to reinstate the zero VAT rate on certain products while failing to address the root causes of inflation.
This inconsistency, according to Syprodat, is creating uncertainty for citizens, particularly those in vulnerable financial positions, who are already struggling with the rising cost of living and high interest rates.
Despite the economic challenges, Cyprus continues to invest in its future through research and innovation.
At the 18th European Researchers’ Night, young scientists were celebrated by the Research and Innovation Foundation (RIF) for their exceptional communication skills and innovative projects. The event, which featured various science competitions, highlighted the talent and creativity of Cyprus’ youth, particularly in areas like design thinking and science communication, setting a positive tone for the country’s research and development landscape.
In line with these forward-thinking initiatives, the Pancyprian Cooperative Promotion Company is working towards establishing a new cooperative bank in Cyprus.
This project aims to fill the gap left by the collapse of the Cyprus Cooperative Bank in 2018. The company’s president, Panikos Hambas, has outlined the steps being taken to re-establish the cooperative movement, with the goal of creating a financial institution that can act as a counterweight to the dominance of Cyprus’ current banking system.
As Cyprus adapts to changes in its financial and technological landscape, regulatory shifts are also underway.
The Cyprus Securities and Exchange Commission (CySEC) has announced that it will no longer accept new applications for registration of Crypto-Asset Service Providers (CASPs). This decision aligns with the forthcoming EU Regulation for Markets in Crypto-Assets (MiCAR), set to take effect in December 2024, marking a transition to a new regulatory framework for the growing crypto market.
Meanwhile, Cyprus’ tourism sector has seen a positive uptick, with the number of tourists in September 2024 increasing by 4.5 per cent compared to the same period last year. The UK remains the primary source of visitors, followed by other key markets such as Israel, Poland, and Germany. The increase in tourist arrivals highlights Cyprus’ ongoing appeal as a holiday destination, providing a welcome boost to the country’s economy.
Meanwhile, the power of branding and marketing in real estate was a focal point at the Elevate Summit 2024, where the Cyprus Mail’s Souzana Psara spoke with CAPSBOLD’s PR Director Olga Loktionova. During their discussion, Loktionova explained how emotional storytelling and influencer marketing are reshaping the industry, particularly in connecting with global buyers. By creating strong emotional connections with their audience, real estate brands are not only selling properties but offering lifestyles, positioning themselves for long-term success.
As industries across Cyprus continue to innovate and adapt, businesses are also preparing for the implementation of the EU’s NIS 2 directive, which will introduce stricter cybersecurity requirements. This move aims to enhance cyber resilience across a broader range of sectors, reflecting the growing importance of digital security in today’s interconnected world.
Additionally, Cyprus is advancing its space ambitions through the Cyprus Space Research and Innovation Centre (C-SpaRC), which recently showcased key developments in its space programme.
With the support of NASA and local governmental backing, the centre is poised to play a transformative role in Cyprus’ space sector, marking yet another area where the country is looking to the future with optimism and ambition.