Op­por­tu­ni­ties in en­ter­tain­ment, me­dia and bank­ing, threats in re­tail and con­struc­tion

Financial Mirror (Cyprus) - - FRONT PAGE -

The main trends, op­por­tu­ni­ties and chal­lenges fac­ing busi­nesses in fi­nan­cial ser­vices, en­ter­tain­ment and the mass me­dia, con­struc­tion and re­tail trade were the fo­cus of an event held in Ni­cosia by PwC Cyprus.

The dis­cus­sion was based on the find­ings of the 19th CEO Sur­vey, en­ti­tled “Redefin­ing busi­ness suc­cess in a chang­ing world”, which gath­ered the in­put of more than 1,400 CEOs from 83 coun­tries.

Specif­i­cally, 176 CEOs from the in­ter­na­tional bank­ing sec­tor, 76 from the en­ter­tain­ment and me­dia sec­tor, 133 from the con­struc­tion sec­tor and 358 from the re­tail and con­sumer sec­tor par­tic­i­pated in the sur­vey, re­spond­ing to ques­tions re­lat­ing to their com­pany.

In the en­ter­tain­ment and me­dia sec­tor, 77% of CEOs said they faced more threats com­pared to three years ago and 61% said there were more op­por­tu­ni­ties. The sit­u­a­tion also ap­pears to be dif­fi­cult in the bank­ing sec­tor, with 71% and 55% stat­ing the same re­spec­tively.

CEOs in the con­struc­tion sec­tor also face more threats, ac­cord­ing to 64% of par­tic­i­pants, com­pared with 49% who saw more op­por­tu­ni­ties. In con­trast to the other sec­tors, CEOs in re­tail trade are more pos­i­tive, with 61% say­ing there were more op­por­tu­ni­ties now than be­fore and 58% more threats.

The bank­ing sec­tor in Cyprus has seen sig­nif­i­cant im­prove­ment in terms of pro­vid­ing liq­uid­ity and loan re­struc­tur­ing. How­ever, the dan­gers re­main, with credit in­sti­tu­tions fac­ing chal­lenges re­lat­ing to ac­qui­si­tions and merg­ers, but also the need to in­vest in new tech­nolo­gies, ex­pand ser­vices and find new mar­kets to fi­nance.

There is strong com­pe­ti­tion in the Cypriot en­ter­tain­ment and me­dia sec­tor be­cause of the rise of the in­ter­net and the ap­pear­ance of new play­ers in the lo­cal and for­eign mar­ket, in­creas­ing the need for in­no­va­tion and in­vest­ment in new tech­nolo­gies, to­gether with re­duc­ing costs.

The con­struc­tion sec­tor shrunk to 2.8% of Cyprus’ GDP in 2015 com­pared with 9.5% in 2008, as the pro­longed pe­riod of re­duced prop­erty prices, low de­mand and the im­po­si­tion of VAT on res­i­den­tial plots had a neg­a­tive ef­fect on the in­dus­try. How­ever, the grad­ual in­crease in cap­i­tal ex­pen­di­ture in the State bud­get in the com­ing years is ex­pected to pos­i­tively af­fect the in­dus­try.

Re­tail trade in Cyprus is show­ing an i mpres­sive re­cov­ery due to an in­crease in con­sumer spend­ing. How­ever, the lack of liq­uid­ity on the mar­ket cre­ates added dan­gers, par­tic­u­larly for the big sup­ply chains, which be­cause of their size are more vul­ner­a­ble to prob­lems. Sim­i­larly im­por­tant is the need for busi­nesses in the sec­tor to in­cor­po­rate on­line ser­vices for con­sumers be­cause of in­creased in­ter­net use.

Dur­ing the event, pre­sen­ta­tions fo­cused on the ben­e­fits and chal­lenges of deals us­ing real ex­am­ples of suc­cess­ful trans­ac­tions, on re­struc­tur­ing and re­design­ing busi­ness op­er­a­tions but also on the im­por­tance of cor­po­rate cul­ture as a com­pet­i­tive ad­van­tage.

“All or­gan­i­sa­tions to­day are ex­posed to an in­creas­ingly glob­alised sys­tem, which as a re­sult means the suc­cess and po­ten­tial of their ac­tiv­i­ties de­pend on many in­ter­re­lated fac­tors, such as global sta­bil­ity and ver­sa­til­ity, the reg­u­la­tory frame­work and trends in each sec­tor,” said PwC Cyprus CEO Ev­ge­nios Ev­ge­niou.

“Par­tic­u­larly, the geopo­lit­i­cal de­vel­op­ments that af­fect our re­gion, such as the United King­dom’s re­cent de­ci­sion to exit the EU, are a cat­alytic fac­tor, which should be eval­u­ated ap­pro­pri­ately by each en­ter­prise in terms of the chal­lenges and op­por­tu­ni­ties it may en­tail.”

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