Marinos Christodoulides: Developments for CSE privatisation in 2025

Improved performance, investment interest and stock market activity on the Cyprus Stock Exchange in 2024 has been noted by the Chairman of the CSE’s Council, Marinos Christodoulides.

In a written statement, Christodoulides analyses the course of the CSE stock market in 2024, the initiatives and development course of the Stock Exchange and its importance in the corporate and economic development of businesses and the Cypriot economy more broadly.

Among other things, he emphasised that within 2025, significant developments are expected to culminate the intensive efforts already underway for the privatisation of the CSE.

According to Christodoulides, the legal drafting of the bill that will govern this regulation is currently being completed and after its expected passage, the Government will proceed with the tendering process to select the appropriate strategic investor.

"We estimate that with the completion of this effort, namely the arrival of a strategic investor - stock exchange for our Stock Exchange, new prospects will open up through the know-how that will be acquired and new experiences, so that this development will contribute positively to the corporate ecosystem and our economy," the Chairman of the CSE’s Council underlined in this regard.

On the improved performance of the CSE, it is noted that by the date of 17 December, 2024, an increase in the general price index of the CSE was recorded by 57.29%, compared to the corresponding price of the general CSE Index on 31 December, 2023, where even then a similar increase in the Index on an annual basis, of 51.88%, was recorded, compared to the year 2022.

Moreover, trading activity also increased significantly in 2024, with the average daily trading volume reaching €1.38 million, compared to a daily trading volume of €377 thousand recorded in 2023. The total capitalisation of the Cyprus Stock Exchange has also increased significantly, now amounting to €23.3 billion (€9.9 billion in 2023), as well as the participation of foreign investors in the capitalization of listed companies, which amounted to 49% of the total capitalisation (from 39.3% in 2023).

Read Chairman of the CSE Council, Marinos Christodoulides' statement below (translated from Greek):

" Another year, 2024, is coming to a close, where improved returns and trading activity have been recorded for the Cyprus Stock Exchange, compared to the corresponding returns of 2023. Specifically, by December 27, 2024, an increase in the general price index of the CSE was recorded of 57.29%, compared to the corresponding price of the general CSE Index on December 31, 2023, where even then a similar increase in the Index on an annual basis, of 51.88%, was recorded, compared to the year 2022.

Trading activity also increased significantly in 2024, with the average daily trading volume reaching €1.38 million, compared to a daily trading volume of €377 thousand recorded in 2023. The total capitalisation of the Cyprus Stock Exchange has also increased significantly, now amounting to €23.3 billion (€9.9 billion in 2023), as well as the participation of foreign investors in the capitalisation of listed companies, which amounted to 49% of the total capitalisation (from 39.3% in 2023). Correspondingly, the participation of Members (brokerage companies) remotely from abroad has also significantly increased, where from 9.6% in 2023, their participation rate in 2024 amounted to 23.46% of daily trading activity.

This year's performance, which is clearly improved, results from the increased interest recorded and which is based mainly on the improved performance of a number of listed companies, including those in the banking sector, as a result of their improved profitability, the granting of dividends to their shareholders, as well as their improved prospects.

It is important to mention that these recorded returns reflect more broadly the significant improvement in the financial figures and prospects of important businesses in the country, as well as the wider Cypriot economy, as demonstrated by the recent and successive positive assessments of the Cypriot economy by international rating agencies.

The Board, Management and Staff of the Exchange promoted for 2024, the development of its new initiatives, as well as the implementation of the Organisation's strategic planning, with the aim of further expanding its products, markets and services provided, as well as to strategically position itself with claims, in the new conditions as they are formed.

The following activities/developments promoted in this context are briefly mentioned:

• Within 2024 and as a result of the creation of a link with the Swiss Depository SIΧ SIS, through which cross-border transfers of securities between Depositories are facilitated, the parallel listing, in addition to the London Stock Exchange where they were already listed, of the European EMTNs of our Republic on the CSE became possible in March 2024. The Exchange is also examining, with the Ministry of Finance, as the issuer of Government Bonds, the introduction of the Delivery Versus Payments (DvP) arrangement, in relation to the primary issuance of T-Bills and other categories of such Bonds, with the aim of attracting an increased number of investors to them and the continuous improvement of the relevant procedures that accompany them.
• The effort to further expand the government and corporate bond market on the CSE was generally intensified in 2024.
• For government bonds, the CSE submitted proposals to the Ministry of Finance to promote the issuance of bonds in the domestic market, in order to expand the investment base in this important investment product, as well as their secondary marketability, through the CSE.
• For corporate bonds, based on previous CSE statements, an improved tax regulation is now in effect, which was passed to encourage the development of this market.
• In 2024, following relevant adjustments by the CSE to its pricing policy, the listing of the first green bond on the CSE was achieved. Due to the particular importance of the Energy sector for our economy, we expect that this important Green Bond market will be able to develop further through the CSE.
• The Exchange's active involvement in the Energy Market continued, both through the auctions of the Republic's Greenhouse Gas Emission Allowances, following relevant authorisation by the Government, and through the active participation of the CSE in the Hellenic Energy Exchange, as a founding shareholder of this Exchange, since 2019. Furthermore, through the preparation of the relevant infrastructure, the CSE will undertake, as planned, in 2025, the clearing of transactions, as well as the work of the cover operator, as will be done in the competitive electricity market when it becomes operational, through the Cyprus Transmission System Operator.
• The Exchange also explored, as it had announced, with its Partners in the Energy sector and in particular with the Hellenic Energy Exchange, the possibility of providing the facility for trading of Guarantee of Origin (GOs) certificates from renewable energy sources.
• It is imperative to provide tax incentives for the development of the Stock Exchange, through the listing of additional new companies, to raise the necessary capital, as well as to increase investment activity. In this context, the Stock Exchange submitted its recommendations to the competent committee appointed by the Ministry of Finance, with the responsibility of promoting the tax reform of the State.
• Additionally, the Stock Exchange, recognising the need to further increase the liquidity of the CSE, has very recently completed its procedures, as announced, for the introduction of the Market Maker institution, an institution that operates successfully in international markets and which contributes to the provision of increased liquidity in them.

The Stock Exchange, as we have repeatedly mentioned, but also as is true internationally, constitutes a fundamental lever for the development of businesses and the economy, for raising the necessary capital for the development of companies and for providing expanded investment options to investors.

Our Stock Exchange is not inferior to other advanced Stock Exchanges, in terms of products, markets, services, as well as infrastructure and should therefore be supported and primarily further exploited by the business community of Cyprus. After all, this also constitutes the broader approach to the European Union during the current period, within the framework of the EU plan for the integration of capital markets (Capital Market Union – CMU), which seeks to further channel capital and resources to listed companies through the Markets, for the implementation of productive investments in the EU, for the introduction of new technology, for the contribution to sustainable development, the development of small and medium-sized enterprises (SMEs), as well as for the digital transition.

The Stock Exchange, like all European stock exchanges, must develop and contribute decisively to the corporate and economic development of the country, as well as to the competitiveness of businesses. Companies and Organisations, private and public, should, through the listing of shares, bonds and other securities, expand their investment base, develop further through the Stock Exchange and raise the necessary funds to channel them into the most productive investments in the country.

In Cyprus, there are several notable companies, from a wide range of activities that should therefore include the Stock Exchange high on their strategic map. Examples include large projects and infrastructure companies (e.g. for Energy, Electricity, Casinos, Marinas), private Universities, Hospitals, Shipping Companies, Tourism Projects, Technology Companies, start-ups, etc.

CSE privatisation

In addition to the above, the culmination of all the initiatives undertaken is the primary development parameter of the CSE, namely that of the privatisation of the Stock Exchange. Within 2025, significant developments are expected to culminate the intensive efforts already being made. These generally concern a large project, large-scale and of essential importance for the capital market. Privatisation is an innovative project for Cypriot standards, with a complexity of a number of issues to be regulated. At present, the legal drafting of the bill that will govern this regulation is being completed and after its expected passage, the Government will proceed with the tendering process for the selection of the appropriate strategic investor.

We estimate that with the completion of this effort, namely the arrival of a strategic investor - stock exchange for our Stock Exchange, new prospects will open up through the know-how that will be acquired and new experiences, so that this development will contribute positively to the corporate ecosystem and our economy.

In conclusion, I note that the CSE will continue its dynamic development path in 2025, always aiming to continuously serve market participants and businesses.

The Cyprus Stock Exchange is always here to help the companies, economy and investment community of Cyprus"

(Source: InBusinessNews)