2020 Cyprus Country Report

and bonds, which operate under the Cyprus
Securities and Stock Exchange Law and the
Investment Services and Activities and Regulated
Markets Law (MiFID). Shares, rights, warrants,
corporate bonds, government bonds/ treasury
bills, collective investment schemes and Global
Depositary Receipts (GDRs) can be traded on
the CSE, with the most popular being shares and
bonds. Currently, CSE participants include 20
Members (Broker Firms), 13 Custodians and 56
Nominated Advisors.
The Main Market, Alternative Market,
Corporate Bonds Market, Government Bonds
Market, Collective Investment Schemes Market
and the Depository Receipts are all segments of
the Regulated Market, which currently lists 65
International Securities Identification Numbers
(ISINs) for shares, 21 ISINs for bonds and 21
ISINs for funds.
The ECM also accepts listing of shares and
bonds for companies whose registry is not kept
by the Cyprus Central Securities Depository
and Central Registry (CSD) – with 44 ISIN’s for
shares and 24 for bonds listed in total. The ECM
offers simplified listing criteria at a low cost and
is successfully attracting companies both locally
and internationally. It has evolved from being
mainly focused on small domestic companies,
to a growing international market offering opportunities
to companies from around the world
– and allows for a more personalised service at
competitive fees, particularly to companies that
are too small to list on a larger exchange or wish
to gain their first experience of listing securities
within the EU. The ECM has proved resilient and
successful in the last years, despite the adverse
economic climate and offers companies with an
attractive commercial proposition the opportunity
to attract funds.
Additionally, the Exchange has the responsibility
for the establishment and management of a
Central Depository and Central Registry (CSD).
The majority of the securities listed on the CSE
are also registered in the CSD. Furthermore,
issuers of non-listed securities that wish to have
their registry maintained by the Cyprus Stock
Exchange may assign this job to the Cyprus CSD.
DIVERSIFICATION AND EXPANSION
In an effort to expand its business, the CSE is
focusing on sectors that are showing strong performance,
such as funds, shipping, and energy.
The aim is to ensure that the securities’ market
can provide the necessary tools and prospects
to participants to achieve their targets, and also
provide regional market participants and companies
a convenient venue for listing and investing
in a transparent, efficient and business-friendly
environment.
With regards to funds, the Cyprus Stock
Exchange has taken several initiatives. CSE operates
two markets for listing funds, the Market for
Tradable Collective Investment Schemes and the
Market for Non-Tradable Collective Investment
Schemes. Listing provides visibility and transparency
to investors, and the Exchange provides fast
and simple listing procedures and a competitive
pricing policy. In addition, the CSE has launched
a new service in order to offer registry services
to fund managers, which means maintaining the
registry of unit holders of non-tradable funds
at the CSE’s Central Depository and Central
Registry in a dematerialised form, and handling
redemptions and transfers of funds’ units.
In the energy sector, the CSE holds a 10%
stake in the Hellenic Energy Exchange (HEnEx)
– which was founded as part of the EU’s target
model to create a single energy market and is expected
to launch operations in accordance with
the new target model as set by EU within 2020.
The CSE is also examining other opportunities
regarding the energy sector which are expected
to be published in the near future.
TRADING VOLUME
For 2019, the turnover amounted to €85.3
million, which represents a year-to-year decrease
of 35.40%, compared to the turnover of €132.1
million in 2018. The daily average turnover for
2019 was €0.35 million per trading day, compared
to €0.53 million in 2018. At year-end, the
equity market capitalisation, amounted to €1.89
billion, compared to €1.93 billion at the end of
2018, thus registering a decrease of 1.99% from
the previous year. The financial sector was the
largest economic group as far as market capitalisation
of the equity market is concerned, with
56.75%, followed by the industrials services with
12.68% of the equity market capitalisation.
STRONG FUNDS INDUSTRY
A sector that was nearly non-existent a few
years ago, Cyprus catapulted itself into recognition
by overhauling and modernising its investment
funds regulatory framework. There has
been growing interest from fund professionals
around the world, but most notably from Europe,
Asia and the Middle East, whose fund managers
are increasingly seeking access to the EU market.
Assets under management (AuM) in Cyprus have
increased by 200% from €2.7 billion in 2016 to
€8.3 billion in 2019, demonstrating that Cyprus is
able to compete with Europe’s longer established
fund domiciles.
A CSE listing provides a number of advantages
for fund managers and investors. The CSE
is an EU-regulated and recognised Exchange,
Sector Profile
Country Report CYPRUS 2020
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