28/01/2016 18:01
The Cyprus Stock Exchange is engaged in talks with foreign bourses in a bid to list Islamic bonds on the Cypriot stock market, CSE CEO Nondas Metaxas has said in an interview with CNA.
The listing of Islamic bonds, also known as Sukuk, is considered a way to attract liquidity in the crisis-hit CSE, whose trading volume declined to record low levels due to the financial meltdown of 2013 in Cyprus.
In bid to avert the collapse of its banking sector, the Cypriot government in March 2013 concluded on a €10 billion bailout with the EU and the IMF. However the programme included the conversion of deposits over €100,000 to equity, to save the island`s larger lender, Bank of Cyprus, whereas Laiki Bank, Cyprus second largest bank was wound down. These developments took their toll on the CSE trading volume.
“The listing of such bonds (in the CSE) could yield millions of dollars as well as significant liquidity in our market, with multiple benefits through the attraction of considerable capital,” he told CNA.
“We are holding contacts with Cypriot companies and foreign firms in the North as well as in the East and South and we are discussing possible cooperation through alliances of bourses on the introduction of Islamic bonds, which are very important,” he said without further elaborating.
Noting that the Constitution of the Republic of Cyprus provides for such alliances, Metaxas said “this is an important but not an easy matter, as there are many issues to be resolved.”
Metaxas also said the CSE is in discussions over possible cooperation with two large groups of European stock markets which, he explained, would assist in resolving basic growth problems facing the Cypriot economy and the stock market.
Furthermore, Metaxas said there is great interest from Cypriot-owned and foreign companies on the CSE`s emerging Companies Market (ECM), noting that he is currently in talks concerning the listing of a Greek large energy company, whereas the CSE board has approved the listing of a UK company.
The ECM market has companies from Russia, Ukraine, Israel, China, Greece and Cyprus, he said, adding this market represents “the internationalisation of the Cypriot economy and we all should support this effort.”
Replying to a question on how the CSE could contribute to tackling the liquidity problems facing the Cypriot economy, Metaxas said that Cypriot companies have no access to liquidity to lend.
“This is a great problem and there can be no growth if the liquidity problem is not solved,” he said.
He noted however that the stock exchange could be an alternative to the banks and provide this capital to companies.
Asked about the consultations taking place concerning the parallel listings, Metaxas said it is necessary to provide Cypriot firms with access to Europe a larger market so as to receive financing.
The parallel or dual listing concerns the listing of Cypriot listed companies on stock markets abroad. The trading of Cypriot companies in the foreign bourses would provide a source of liquidity as well as profit to the CSE.
The listing of Islamic bonds, also known as Sukuk, is considered a way to attract liquidity in the crisis-hit CSE, whose trading volume declined to record low levels due to the financial meltdown of 2013 in Cyprus.
In bid to avert the collapse of its banking sector, the Cypriot government in March 2013 concluded on a €10 billion bailout with the EU and the IMF. However the programme included the conversion of deposits over €100,000 to equity, to save the island`s larger lender, Bank of Cyprus, whereas Laiki Bank, Cyprus second largest bank was wound down. These developments took their toll on the CSE trading volume.
“The listing of such bonds (in the CSE) could yield millions of dollars as well as significant liquidity in our market, with multiple benefits through the attraction of considerable capital,” he told CNA.
“We are holding contacts with Cypriot companies and foreign firms in the North as well as in the East and South and we are discussing possible cooperation through alliances of bourses on the introduction of Islamic bonds, which are very important,” he said without further elaborating.
Noting that the Constitution of the Republic of Cyprus provides for such alliances, Metaxas said “this is an important but not an easy matter, as there are many issues to be resolved.”
Metaxas also said the CSE is in discussions over possible cooperation with two large groups of European stock markets which, he explained, would assist in resolving basic growth problems facing the Cypriot economy and the stock market.
Furthermore, Metaxas said there is great interest from Cypriot-owned and foreign companies on the CSE`s emerging Companies Market (ECM), noting that he is currently in talks concerning the listing of a Greek large energy company, whereas the CSE board has approved the listing of a UK company.
The ECM market has companies from Russia, Ukraine, Israel, China, Greece and Cyprus, he said, adding this market represents “the internationalisation of the Cypriot economy and we all should support this effort.”
Replying to a question on how the CSE could contribute to tackling the liquidity problems facing the Cypriot economy, Metaxas said that Cypriot companies have no access to liquidity to lend.
“This is a great problem and there can be no growth if the liquidity problem is not solved,” he said.
He noted however that the stock exchange could be an alternative to the banks and provide this capital to companies.
Asked about the consultations taking place concerning the parallel listings, Metaxas said it is necessary to provide Cypriot firms with access to Europe a larger market so as to receive financing.
The parallel or dual listing concerns the listing of Cypriot listed companies on stock markets abroad. The trading of Cypriot companies in the foreign bourses would provide a source of liquidity as well as profit to the CSE.
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