Both the assets and liabilities of Portfolio Investments increased in 2021, compared to 2020, according to a report published by the Central Bank of Cyprus on Wednesday.
According to CBC, total stocks of PI assets in 2021 amounted to €27.4 billion, increased from €22.8 billion in 2020. This is reflected by the increase recorded mostly in equity and investment fund shares and to a lesser extent in long-term debt securities investments made by residents abroad, the CBC notes.
Debt securities assets reached €14 billion in 2021, representing 51% of total portfolio assets compared with 58% in 2020, and equity and investment fund shares totalled €13.4 billion in assets in 2021, accounting for 49% of total portfolio assets, compared to 42% for 2020.
The main investment destinations related to PI assets, for the year 2021, are Russia, Luxembourg, Ireland the European Investment Bank (EIB) and the United States, which accounted for approximately 56% of the total stock. The number of partner countries for the remaining 44% consists of 128 countries.
The main counterpart sector in which resident investors invested in 2021, was “nonfinancial institutions” which accounted for 28% of the total PI assets in 2021, followed by “investment funds” with 20% of total PI assets.
Total PI liabilities stocks in 2021 amounted to €34.5 billion, increasing from €30.4 billion in 2020. The increase reflects an increasing interest of nonresidents for investing mostly in long-term debt securities issued by Cypriot residents and to a lesser extent in equity and investment fund shares, CBC notes.
Debt securities held by non-residents totalled €21.8 billion in 2021 from €19.5 billion in 2020, representing 63% of total portfolio liabilities in 2021 and equity and investment fund shares totalled €12.7 billion in 2021 from €10.9 billion 2020 respectively, accounting for 37% of total portfolio liabilities.
CBC clarifies that, when treating SPEs as non-residents, total PI assets drop by approximately 10% for 2021 and 11% for 2020 compared to when treating SPEs as residents. The highest impact is located in equity and investment fund shares, which fall to €11 billion in 2021 compared with €13.4 billion when treating SPEs as residents.