A NCIIAL MII ROR THIISS WEEK

Financial Mirror (Cyprus) - - FRONT PAGE -

A CSE probe into the 1999 stock mar­ket boom and bust failed to find the real cul­prits, but re­ported ex­ten­sive cases of cover up and de­lib­er­ate mis­takes, while on the Euro­pean front, in­com­ing Com­mis­sion chief Joe Manuel Bar­roso faced a cru­cial vote by Euro­pean par­lia­men­tar­i­ans, the Fi­nan­cial Mir­ror re­ported in is­sue 592, on Oc­to­ber 27, 2004.

As de­tails from the CSE In­ves­ti­ga­tion Com­mis­sion’s probe into the 1999 stock mar­ket scan­dal emerge, it is be­com­ing in­creas­ingly clear that a ma­jor cover up has been or­ches­trated, shield­ing the real cul­prits who are re­spon­si­ble, di­vert­ing at­ten­tion in­stead to share deal­ing by politi­cians and other is­sues. The fact that the 13-page re­port con­tains many in­ac­cu­ra­cies and mis­takes, some­thing which is in­ex­cus­able for some­thing that has been un­der­way for four years, gives added cre­dence to spec­u­la­tion that it may have been done in­ten­tion­ally in or­der to thwart the ef­forts of the At­tor­ney Gen­eral to file charges. As re­peat­edly re­ported

So­cial stake­hold­ers will em­bark on a his­tor­i­cal round of talks to re­form the COLA wage in­dex­a­tion sys­tem, the Cyprus Fi­nan­cial Mir­ror re­ported in is­sue 83, on Novem­ber 2, 1994, while Paneuro­pean In­surance was about to an­nounce a stock-split.

The Cost of Liv­ing Al­lowance, prob­a­bly the most con­tro­ver­sial is­sue in the is­land’s econ­omy, will be dis­cussed in mid-Novem­ber with the di­rect in­volve­ment of Pres­i­dent Glaf­cos Clerides. Last week, the em­ploy­ers fed­er­a­tion OEV said that labour costs con­tin­ued to erode the com­pet­i­tive­ness of the Cyprus in this news­pa­per, politi­cians, bro­kers, banks, the CSE Coun­cil and CySEC of 1999/2000, the me­dia and in­vestors all have a por­tion of the blame for what went wrong in the stock mar­ket, but the prin­ci­pal blame lies with the own­ers of of bank­rupt com­pa­nies that suc­cess­fully went pub­lic through a tam­per­ing of their ac­counts, with the help of au­di­tors, lawyers, spon­sor­ing bro­kers and in­vest­ment bankers.

In­com­ing Euro­pean Com­mis­sion chief Jose Manuel Bar­roso faces a cru­cial test of cred­i­bil­ity and con­fi­dence as EU MPs cast make-or­break votes on the bloc’s new ex­ec­u­tive team set to take of­fice next week. Left and cen­tre-left crit­ics pressed on with de­mands that Bar­roso must move Italy’s con­tro­ver­sial jus­tice af­fairs com­mis­sioner-des­ig­nate Rocco But­tiglione to another post due to his ul­tra­con­ser­va­tive view on ho­mo­sex­u­als, women and sin­gle moth­ers.

Ger­many and France of­fered their en­dorse­ment for Turkey’s even­tual EU mem­ber­ship at a bi­lat­eral sum­mit, as French Pres­i­dent Jac­ques Chirac brushed aside doubts about Paris’ back­ing, while Ger­man Chan­cel­lor Ger­hard Schroeder said they would vote for Ankara to be in­vited to EU mem­ber­ship talks in econ­omy, with profit mar­gins shrink­ing fast and the gen­eral de­cline of in­dus­trial ex­ports and in­vest­ments con­tin­u­ing.

The in­surance company’s board will dis­cuss the pro­posal for a 2-to-1 stock split and re­duce its nom­i­nal share value from CYP 1 to 50c. Chair­man Ni­cos Sha­co­las told share­hold­ers at the 8th AGM that even though he was not too keen on the idea, he did not see any dam­age from the move which would bring Paneuro­pean in line with the other in­surance stocks, Univer­sal Life and Phi­liki, both of which have 50c nom­i­nal shares.

The two business or­gan­i­sa­tions, the Cham­ber KEVE and the Fed­er­a­tion OEV, have en­tered a hot race for em­ployer supremacy, with the first an­nounc­ing an EU award in its 1993 Cyprus Ex­port Awards scheme, repli­cat­ing a sim­i­lar award De­cem­ber in Brussels.

The Economist In­tel­li­gence Unit has ad­justed its forecasts re­gard­ing the Cyprus econ­omy, slash­ing es­ti­mated 2004 and 2005 GDP growth rates from 3.4% and 3.8% to 3.2% and 3.5%, re­spec­tively, mainly due to the con­tin­ued slump faced by the tourism in­dus­try.

The fi­nal year-on-year in­fla­tion for this year will be close to 4.5%, higher than pre­vi­ously fore­cast, due to a strong rise in in­fla­tion for Septem­ber pushed up by the rise in a fruit and veg­etable prices, as well as im­ported in­fla­tion of 5.7% due to for­eign ex­change fluc­tu­a­tions with the CYP, while a drop is seen in the ser­vices sec­tor with in­fla­tion drop­ping from 6.4% to 4.2%.

The first stage of the Har­vardCyprus In­ter­na­tional Ini­tia­tive for the En­vi­ron­ment and Pub­lic Health is ex­pected to be com­pleted within weeks, with the for­mal es­tab­lish­ment by the end of Novem­ber of the Cyprus In­ter­na­tional In­sti­tute for the En­vi­ron­ment and Pub­lic Health (CII) a non-profit or­gan­i­sa­tion, fol­lowed by the of­fer of schol­ar­ships at Har­vard, the re­cruit­ment of pro­fes­sion­als and the open­ing of tem­po­rary of­fices by the end of this year.

The num­ber of build­ing per­mits tum­bled a fur­ther 26.7% in Au­gust, fol­low­ing the 21% de­cline in July, while steeper de­clines were re­ported in the ca­pac­ity and value of projects and ap­pli­ca­tions in the Fa­m­a­gusta re­gion are now lower than last year.

The gov­ern­ment placed ad­ver­tise­ments for a tax amnesty call­ing all un­taxed earn­ings in 2002 to be de­clared un­til De­cem­ber 6 for a flat 5% tax and un­til 31 De­cem­ber for a 6.5% tax rate. given out by OEV a year ear­lier.

Mar­gin ac­counts, bet­ter known as in­vestor ac­counts, will even­tu­ally be­come the only way through which Cypriot in­vestors will be able to deal when trad­ing in the stock mar­ket, said George Tri­pat­sas, Man­ager of Hel­lenic Bank In­vest­ments. By plac­ing ei­ther cash or se­cu­ri­ties as mar­gin, clients can trade up to four times and over their de­posit level and buy stocks in pub­lic com­pa­nies.

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