CSE step closer to privatisation
Still ‘unfairly’ carrying the stain on its reputation from the bubble that burst over 20 years ago, the Cyprus Stock Exchange is now one step closer to finding a strategic partner to boost its attractiveness.
The CSE is finally moving ahead with its privatisation plans, as the bourse signed an agreement with the Harneys Loizou Armila Shearman Consortium, who will be preparing an action path.
The consultants assigned will prepare a business plan for the CSE and handle all legal issues and actions required to select the most suitable strategic partner, investor for the Nicosia exchange.
The consortium will prepare a legal framework needed to facilitate the transition of the CSE from a public institution to a private entity.
The stock exchange agreed to an open tender procedure and evaluated the resulting offers from the interested parties.
Last July, the consortium was awarded the contract but was contested in court by an opposing bidder.
A court eventually green-lighted the agreement earlier this year, with the deal going ahead. In comments to the Financial Mirror, CSE Chairman Marinos Christodoulides said going into partnership with a well-esteemed strategic partner will offer a lot to the bourse.
Aiming to fulfil its role in the further development of local companies and attract foreign investments, Christodoulides said that the bourse would benefit from the know-how, new technologies and a range of financial products.
“An active capital market can promote economic growth and entrepreneurial investment. “Unfortunately, in the 26 years of its operation, with its capacity as a state-owned institution, the CSE has failed to garner the interest of foreign investors,” said Christodoulides.
“Corporate funding in Cyprus is virtually limited to bank loans.
“While a problem for the growth of businesses, it has also contributed to the banking sector’s problems by potentially tempting banks to enter into riskier financing”.
He noted that the CSE had been caught up in a vicious cycle, where no investments would come due to the lack of trust in the institution, while the lack of investments deepened the trust issue.