Un­cer­tainty damp­ens FDIs, in­vestor groups tell MPs

Financial Mirror (Cyprus) - - FRONT PAGE -

Un­cer­tainty over the con­tro­ver­sial fore­clo­sures law and the in­sol­vency frame­work is dis­cour­ag­ing for­eign di­rect in­vestors who in­tended to pump money into projects in Cyprus, in­vestor groups told the House Trade Com­mit­tee on Tues­day.

The fore­clo­sures bill re­mained in limbo af­ter op­po­si­tion par­ties in par­lia­ment voted to keep the present pack­age suspended, jeop­ar­dis­ing a calm re­view of the is­land’s eco­nomic ad­just­ment pro­gramme un­der the 10 bln euro bailout pro­gramme.

The par­al­lel set of reg­u­la­tions on in­sol­ven­cies seems to be pro­ceed­ing, at last, with the reg­u­la­tions de­ter­min­ing ex­am­in­er­ship now con­cluded, while the fi­nal thorny is­sue of third party loan guar­an­tors still pending.

Po­lit­i­cal par­ties want guar­an­tors and pri­mary homes to be ex­empted from fore­clo­sures by banks, where the rate of non­per­form­ing loans has soared to an un­man­age­able 50% of the bank­ing sys­tem’s loan­book

Frixos Sav­vides, Chair­man of Cyprus In­ter­na­tional Busi­nesses As­so­ci­a­tion (CIBA), said that the first thing in­vestors see is in­se­cu­rity in re­la­tion to the fore­clo­sures law.

The is­sue must be re­solved very soon and “we need to see se­ri­ous moves from banks so as to at­tract in­vest­ment funds,” he said.

Mar­ios Tsi­akkis, Sec­re­tary Gen­eral of the Cyprus Cham­ber of Com­merce and In­dus­try (KEVE), added that the de­lay with the fore­clo­sures prob­lem is also pre­vent­ing Cyprus from tak­ing ad­van­tage of the ECB’s quan­ti­ta­tive eas­ing pro­gramme that would have seen the cen­tral bank pur­chas­ing up to 120 mln eu­ros worth of Cyprus eq­ui­ties a month start­ing in March.

On the other hand, Com­merce and In­dus­try Min­istry of­fi­cials in­sist that the pro­ce­dure to reg­is­ter a com­pany is just three days with a cost of 100 eu­ros and that while the one-stop shop ex­ists, it is not fully ef­fec­tive.

Christodou­los An­gas­tin­i­o­tis, Chair­man of the state’s Cyprus In­vest­ment Pro­mo­tion Agency (CIPA), said that in or­der to at­tract busi­nesses, bu­reau­cracy must be elim­i­nated.

“From March 2013 on­wards, for­eign in­vest­ments in Cyprus have to­talled 3.2 bln eu­ros,” he said. Of that, in­vest­ments worth 400 mln eu­ros were made in sports and ho­tels, 1.2 bln went to­wards the re­cap­i­tal­i­sa­tion of banks and 1.5 bln flowed into state cof­fers from is­su­ing res­i­dence per­mits and pass­ports.

An­gas­tin­i­o­tis added that in­vest­ments in the en­ergy sec­tor in­cluded the cre­ation of a so­lar ther­mal park in Li­mas­sol.

He said, how­ever, that dur­ing his trip to Australia he met the rep­re­sen­ta­tives of a large pipe man­u­fac­tur­ing com­pany who was con­sid­er­ing in­vest­ing in Cyprus, how­ever, the un­friendly en­vi­ron­ment due to th­ese pro­cesses pre­vented him from do­ing so.

He said that an in­vest­ment con­fer­ence

will be held in Li­mas­sol in few days, where 14 in­vest­ment projects will be pre­sented. It will be at­tended by ma­jor com­pa­nies and 63 in­vest­ment funds, in­clud­ing big names such as Gold­man Sachs, Bank of Amer­ica, So­ci­ete Gen­erale, HSBC and at least 15 funds from the Arab world, An­gas­tin­i­o­tis said.

On be­half of the ac­count­ing pro­fes­sion, ICPAC Gen­eral Manager Kyr­i­a­cos Ioan­nou stressed the need for strate­gic plan­ning for the for­eign in­vest­ments and to en­rich the coun­try’s prod­uct.

House Com­merce Com­mit­tee Chair­man and DISY MP Zacharias Zachar­iou noted that in­vestors want to in­vest safely.

“When they are fright­ened by the un­cer­tain­ties of the bank­ing sys­tem and they are suf­fer­ing in the public ser­vice, they will go else­where”, he added.

Newspapers in English

Newspapers from Cyprus

© PressReader. All rights reserved.