THEE FFII N A N CII ALL MII R O R T HI­ISS WEEEE K

Financial Mirror (Cyprus) - - FRONT PAGE -

The euro rose to a record high against the dol­lar after Rus­sia’s cen­tral bank said it might in­crease the amount of euros in its re­serves in an at­tempt to re­duce re­liance on the dol­lar. The Cyprus pound also tracked the euro higher and

The Euro hit a new record high, with the CYP al­ready track­ing the common cur­rency and Rus­sia say­ing it will add more euro re­serves, just as the lo­cal par­ties backed the plan for ERM en­try, while Hel­lenic Bank an­nounced dis­ap­point­ing 9-month re­sults, the Fi­nan­cial Mir­ror re­ported in is­sue 596, on Novem­ber 24, 2004. as­sum­ing the $1.310 rate holds, is ex­pected to trade at a fresh year high of $2.266, as the CYP-EUR re­mained un­changed at 1.730.

Cyprus’ chances of ap­ply­ing to join the Euro­pean Ex­change Mech­a­nism (ERM II), paving the way for euro-zone en­try by 2007, gained broad support from the po­lit­i­cal par­ties and so­cial part­ners to push ahead with a pack­age of fis­cal re­straints an put state fi­nances in or­der. The gov­ern­ment has in­tro­duced a tax amnesty and speedy pas­sage of prop­erty deed trans­fer pack­ages, which are aimed at re­duc­ing the 2004 deficit. But the em­pha­sis re­mains on mak­ing this sus­tain­able with civil ser­vants and em­ploy­ees at semi-gov­ern­ment or­gan­i­sa­tions of­fered a two-year wage freeze with 2% wage hikes in the third year on the prom­ise that it will not pro­ceed with new hir­ings. (Ed: Yeah, sure!)

Hel­lenic Bank failed to keep up with the profit growth of its two peers fol­low­ing the re­lease of greatly dis­ap­point­ing nine-month re­sults which saw the de­clared prof­its in the P&L ac­count wiped out by ma­jor reval­u­a­tion on in­vest­ment losses in the Re­serve ac­count. Net prof­its ad­vanced by 66% to CYP 4.02 mln, far short of the 214% growth at Bank of Cyprus to CYP 30.7 mln and 100% at Laiki to CYP 16 mln. The re­sult jus­tify the 34% de­cline in share price to 37c since the be­gin­ning of the year, in con­trast to BOC and CPB that were up 15% and 3%, re­spec­tively, buck­ing the 10.6% over­all de­cline of the CSE All Share in­dex.

Fi­nance Min­is­ter Makis Ker­avnos said that for­eign di­rect in­vest­ments in 1997-2004 reached EUR 360 mln after all re­stric­tions for for­eign own­er­ship were lifted in 2000.

Home prices are up 9.7% from Jan­uary to Oc­to­ber, up 0.8% from the pre­vi­ous month, ac­cord­ing of the Buy­Sell In­dex. The av­er­age home price in Oc­to­ber was CYP 85,474 (EUR 146,040).

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