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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.
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.