Sapienta Cyprus Teaser, 2 May 2023
What Cyprus analysis did you miss out on this month?
Welcome to Sapienta Cyprus Teaser, a sub-series of Sapienta Cyprus Snippets. Below is the shortened executive summary from my latest monthly Sapienta Country Analysis Cyprus: unrivalled independent analysis on all things Cyprus. Learn more about other features of these Sapienta Cyprus Snippets here. Learn more about the flagship Sapienta Country Analysis Cyprus product here.
Shameless plug
But first: a shameless plug! Sapienta Country Analysis Cyprus recently celebrated its 10th anniversary. I am confident in saying that the monthly report gives you insights on Cyprus that you will not find anywhere else. To give you a taste of what you are missing out on, let me give you an insight into what subscribers received in just a single monthly report issued on 30 April.
Energy. Did you know that energy policy has undergone a profound shift in the past two months? What does it mean for oil/gas, renewables and electricity companies? Are you keeping up to date with rapidly changing energy developments on the island?
Fiscal policy/geopolitics. The new government has pledged that it will spend 2% of GDP on defence. Do you know how much it is currently spending? We crunch the hard-to-get numbers and review our monthly forecast for the budget balance and public debt.
ESG bonds. The government has been issuing 10-year bonds since 2004. How much did the recent sustainable bond cost compared with previous issuances? We have the data archive to find out.
Banks. Deposit stability has been in the news for global banks lately and Cyprus has been in the news because 23 Cypriots have been sanctioned by the US and UK over dealings with Russian clients. Why are the figures on Russian deposits cited by the Central Bank of Cyprus, Bank of Cyprus and Hellenic Bank mutually incompatible? What would happen if every single dollar of Russian money left the Cypriot banks?
Macroeconomy. What is the property market telling us about the macroeconomy? Where will it head next? This month we take a deep dive into the real estate market and review our medium-term forecast for real GDP growth.
Economy of northern Cyprus*. We sift through the most reliable sources to make an estimate on a highly sensitive topic: how many people of Turkish origin live in northern Cyprus and how does that compare to the number of people of Turkish Cypriot origin? We also keep you up to date with energy and other economic developments north of the UN-monitored buffer zone (Green Line). *Areas not under the effective control of the government of the Republic of Cyprus.
Who subscribes?
I launched the reports in December 2012, when it was clear that Cyprus was entering a financial crisis. I have since expanded the monthly reports from three to six sections and added more tables and charts within the text. If you are invested in Cyprus, have your headquarters here, are thinking of moving your headquarters here, or need a reliable, independent source to report back to headquarters on, this is the report trusted by:
major AMC shareholders in Bank of Cyprus and Hellenic Bank
oil and gas majors
big four accounting firms
local investors
foreign investors
the European Commission
the World Bank
the United Nations
more than a dozen embassies
and more
What subjects are covered?
Each month I take a deep dive into six subjects:
Politics including the Cyprus problem
Energy including natural gas, and structural reforms
Fiscal policy including a monthly medium-term budget and debt forecast
The banking sector including statistics, bank results, government policy and sector news
Macroeconomy analyzing the dozens of statistics that are released each month and a monthly medium-term GDP forecast
The economy of northern Cyprus including developments in energy, tourism, budget stability and the banking sector
There is really nothing else like it in the market to match the breadth and depth of analysis. You can learn more about subscription options here and you can learn more about how I came to know so much about all these subjects here.
Get in touch if you want a free trial or want to subscribe. I am also testing out whether there is interest in a subscription to just a single section of the report. Feel free to get in touch if that might be of interest.
And finally, what you came here for, the shortened executive summary.
EXECUTIVE SUMMARY 30 APRIL 2023
POLITICAL ANALYSIS AND OUTLOOK. US and UK sanctions on Cypriots have rocked the establishment. A National Security Council will be established as regional military cooperation increases.
ENERGY AND STRUCTURAL REFORMS. The energy minister is wooing offshore natural gas licensees as risks relating to Egypt exports increase. Incentives for renewables are increasing.
FISCAL PERFORMANCE AND FORECAST. The budget surplus expanded in January-February. We estimate government expenditure on defence. The green bond issued in early April was the most expensive 10-year bond since 2015.
BANKING SECTOR. We examine Russian-origin accounts in Cyprus. Proposals for a foreclosure court are back on the agenda. The finance minister is leaning on banks about lending rates. Eurobank is preparing to buy Hellenic Bank.
MACROECONOMIC TRENDS AND FORECAST. We are still forecasting real GDP growth of 2.7% in 2023 but given the latest statistics we might revise it upwards once the first-quarter GDP estimates are out.
ECONOMY OF NORTHERN CYPRUS*. Figures cited about Turkish-national voters may be misleading. Moves are being made towards an underwater electricity cable, while significant investment is pledged for the ports and Varosha.
*Areas not under the effective control of the government of the Republic of Cyprus.