TTTTHHHHEEEE FFFFIIIINNNNAAAANNNNCCCCIIIIAAAALLLL MMMMIIIIRRRRRRRROOOORRRR TTTTHHHHIIIISSSS WWWWEEEEEEEEKKKK

of their self-invested personal pensions, with a serious impact to buyers on the island, as Cyprus was one of the few countries that recognises trusts, unlike holiday home destinations France and Spain.

IBUs

buy

CYP:

International banking units (formerly “offshore” banks) are rushing to buy Cyprus pounds in order to comply with a Central Bank directive ordering them to hold 2% of their deposits as Minimum Reserve with the central bank as from January 1, 2006. The demand for CYP 42-45 mln during December will put upward pressure on the already strong Cyprus pound.

CSE profit stalls:

The profit performance of the 21 public companies reporting their nine month results showed a mediocre performance with total profits actually declining, if the spectacular results of Bank of Cyprus and Laiki are excluded. The 21 reported a total of CYP 109.8 mln in profits, up 34% from CYP 82 mln a year ago, but this includes CYP 50.5 mln from BOCY and 30.4 mln from CPB.

A massive over-subscription in the 10year and 52-week T-bill auction caused a plunge in bond yields, with the first dropping from 4.22% at the September auction to 4.08%, while the 52-week paper was down from 3.51% in September to 3.12%.

Finance Minister Michalis Sarris said that prospects for the economy seem “encouraging” with income of CYP 2.3 bln (EUR 4 bln) and expenses CYP 3.3 bln (EUR 5.7 bln) in the 2006 Budget, with the fiscal deficit dropping to 3.7% of GDP.

Bond yield:

Fiscal

deficit down: