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Demetra claims high compensations from the state

14/11/2007 10:05
Demetra Investments claims millions of pounds from the state. In his interview to StockWatch, Demetra General Manager, Nicos Michaelas, said that compensations concern the unconstitutionality of the law approved by the Parliament in 2001, which forced the investment companies to invest 80% of their capital in the CSE. According to Mr. Michaelas, at the current stage the Company tries to prove the accounting calculation of the losses, since the law led Demetra in loss making investments.

The law, proposed by former DISY MP, Prodromos Prodromou, was deemed unconstitutional by the Supreme Court in 2004. After the Court’s decision, sources said that compensations could reach £150 million. Demetra is the largest investment company listed in the CSE.

Seven years after the Company’s listing in the CSE, Mr. Michaelas talked about the restructuring of its portfolio, which currently worth £160 million. “This restructuring aims to reduce the volatility of the portfolio’s returns, protecting the Company when the stock markets follow a downward trend”, Mr. Michaelas said, stressing that the investment property are currently 15% of the Company’s portfolio. “Demetra did not join the sector late, since the prospects are still very good”, he added.

With regard to Demetra’s investments in listed companies in Cyprus and abroad, Mr. Michaelas said that they exceed £91.5 million and are 57% of the Company’s assets. “The selection of companies is based on studies carried out in agreement with their associates, which are the Cooperative Central Bank, Goldman Sachs International, Eurobank, Laiki Investment, Egnatia and Sharelink”, he noted.

Mr. Michaelas emphasized that Demetra invests in companies with stable and increasing profitability, satisfactory performance on equity, improved capital return indices, expansion of activities, productivity, finance, satisfactory dividend policy etc.

The General Manager also commented on the value of Demetra’s portfolio, stressing that the breaking of the barrier of £200 million is a matter of time.

Referring to the attraction of the foreign institutional investors, Mr. Michaelas said that the rational management of the Company’s portfolio and its satisfactory results played an important role.

On the question why Demetra is trading with a discount of 40% from its asset value, Mr. Michaelas believes that the market is being unfair to Demetra share and the real reasons for this behaviour focus on the past losses.