Cyprus Business Now: weekly wrap-up

Here are the top business stories in Cyprus from the week starting September 2:

On the topic of international cooperation, Saudi Arabian Transport Minister, Saleh Bin Nasser Al-Jasser, visited DP World Limassol’s general cargo and cruise terminal on Monday, where he discussed avenues for further cooperation in areas of mutual interest. Cyprus Transport Minister Alexis Vafeades, along with Deputy Minister of Shipping Marina Hadjimanolis, provided a tour of the Limassol port and passenger terminal. They also engaged in discussions on strengthening the ties between the two nations. In his statements following the visit, the Saudi Transport Minister expressed his pleasure and satisfaction with the visit and hospitality in Cyprus, describing the meeting as constructive for identifying potential areas of collaboration. “The two countries already enjoy strong ties and close cooperation in the international community regarding transportation,” he stated. “We work together in the International Maritime Organisation and other international organisations,” he added.

Switching to economic challenges, the European Court of Auditors on Tuesday raised concerns about the slow absorption of the Recovery and Resilience Facility (RRF) funds across the European Union, warning of potential risks to project completion within the planned timeline. According to the ECA’s latest report, the funds aimed at boosting economic recovery following the pandemic are entering the real economy at a slower pace than anticipated. As of the end of 2023, Cyprus had only submitted 40 per cent of the payment requests outlined in the indicative schedules of its operational arrangements, compared to the EU average of 70 per cent. Additionally, only 8 per cent of the allocated funds for Cyprus had been disbursed, with just 5 per cent of the milestones achieved. This corresponds to 14 out of a total of 271 milestones. The report highlighted that by the end of 2023, EU member states had drawn less than one-third of the recovery funds they were entitled to, with final recipients receiving only about half of the funds transferred from Brussels to national treasuries. The ECA pointed out that delays, which occurred during the first three years of the RRF’s implementation, are jeopardising the mechanism’s overall objectives.

In terms of market dynamics, Cyprus saw an increase in the sales of petroleum products during July, which totalled 134,484 tonnes, marking a 4.6 per cent increase compared to July 2023. According to a report released on Tuesday by the Cyprus Statistical Service (Cystat), there was a rise in the sales of marine gasoil, which jumped by 11.9 per cent. Aviation kerosene and heavy fuel oil recorded increases of 0.6 per cent and 14.5 per cent, respectively.

On a different note, the Cyprus property market saw apartments emerge as the preferred choice among buyers during the second quarter of 2024, according to a report released on Tuesday from the Cyprus Real Estate Agents Registration Council. The council explained that this was driven primarily by the high costs associated with purchasing houses and limited financing options for local buyers. The council’s quarterly real estate bulletin, based on data retrieved from the Land Department, includes an analysis focused on four main categories of properties. These are apartments, houses, plots, and fields. The council said that it “aims to capture the average value of completed sales in each district and the number of transactions”. The council also clarified that the average price data does not solely reflect sales in the urban centres of free Cyprus.

Meanwhile, Darefore, a Paphos-based startup founded by brothers Marios and Panayiotis Kyriakou, has been incorporated into the KV Fund portfolio. According to an official announcement released this week, the company’s addition to the KV Fund portfolio follows a strategic investment aimed at accelerating the company’s growth. Darefore has carved out a niche with its biometrics system that merges wearable technology and smart data-driven methodologies. The company is focused primarily on sports performance enhancement and injury prevention. The roots of Darefore stretch back to a discernible void in the cycling scene, a predicament Marios and Panayiotis, both ardent triathletes, aimed to rectify. They identified a glaring absence of on-the-go solutions to refine cycling positions both indoors and outdoors. Harnessing their extensive IT expertise and relentless research, they conceived the Smart Cyclo project.

Additionally, the Cyprus Securities and Exchange Commission (CySEC) this week announced that it has imposed a total administrative fine of €50,000 on Cypriot investment firm (CIF) IC Markets (EU) Ltd. According to the announcement, the fine was imposed for violations of the Investment Services and Activities and Regulated Markets Law of 2017 (L.87(I)/2017). In addition, CySEC said that the issuing of the fine follows a decision by the commission’s board on July 1, 2024. The commission explained that the fine was issued for three separate infringements. CySEC determined that IC Markets had failed to take sufficient steps to achieve the best possible outcome for its clients when executing orders, a breach of section 28(1)(a) of the law, resulting in a €30,000 penalty.

Continuing on the theme of innovation, the Cyprus Chamber of Commerce & Industry (Keve) on Thursday announced that the Shorewinner project, a pioneering effort to advance skills in the offshore renewable energy sector, is set for its official launch in Cyprus. The chamber will host the event at its premises in Nicosia on September 26. It is scheduled to start at 11:00 and conclude at 13:00. According to the chamber, the gathering is expected to draw key figures from across Southern Europe, all focused on strengthening the region’s expertise in renewable energy sources. “The Shorewinner project is an ambitious collaboration under the Erasmus+ programme, uniting 22 partners from five Southern European countries—Portugal, Spain, Italy, Greece, and Cyprus,” the chamber said in its announcement.

Moreover, the Cyprus Information Technology Enterprises Association (CITEA) announced this week that it has signed a cooperation agreement with the Dubai World Trade Centre (DWTC). This agreement paves the way for Cypriot IT companies to participate in the prestigious GITEX technology exhibition, held annually in Dubai. This agreement marks a significant step forward for Cyprus’ growing tech sector, with CITEA now acting as the official representative of DWTC in Cyprus for both the GITEX Global 2024 and Global DevSlam 2024 exhibitions, which are scheduled to take place October 14 until 18, 2024.

Transitioning to economic trends, Cyprus saw a significant rise in consumer prices in August 2024, with olive oil prices soaring by 62 percent compared to August 2023. According to the latest Consumer Price Index data, which was processed by the Cyprus Consumer Association, potatoes saw a similarly sharp increase, with prices climbing by 29 percent over the same period. In addition to these essential food staples, other categories recorded notable hikes. Ticket fares for passenger buses and coaches rose by 26 percent, while fresh vegetables experienced a 19 percent rise.

Addressing transportation issues, the Larnaca Regional Tourism Board (Etap) and the Larnaca Chamber of Commerce and Industry (Evel) on Friday called for significant improvements to public transport services in the district’s mountainous regions. They also said that the Transport Ministry has an obligation to support these areas. In a joint statement, the two bodies explained that they participated in a meeting with Lefkara mayor Sophocles Sophocleous, and deputy mayor Efthymios Strouthos. The meeting involved a discussion of the various issues concerning the tourist and business development of Lefkara. One of the main issues raised was “the lack of connectivity of Lefkara and, in general, mountainous Larnaca, with the city centre and the tourist area, through public transport”. The two bodies and the local authority expressed “their strong dissatisfaction with the recent negative response they received from the Transport Ministry, and previously from the urban transport company Larnaca Public Transport”.

Fostering creativity, the Nicosia Municipality on Friday announced the launch of a new two-month business accelerator programme. This initiative is specifically aimed at individuals, teams, and existing businesses in the creative and cultural sectors who are looking to develop their ideas. According to a statement from the municipality, the Nicosia HUB-IN Accelerator is “designed to support the growth of creative and cultural enterprises”. The programme is offered free of charge and is being implemented in collaboration with the University of Cyprus’ Centre for Scientific Training, Evaluation, and Development, the Cyprus Energy Agency, and the CYENS Centre of Excellence. The accelerator focuses on entrepreneurial ideas, products, and services within the creative and cultural industries, with a particular emphasis on preserving and showcasing the historical and cultural heritage of Nicosia.

Lastly, in a move towards enhancing online privacy, Cyprus-based internet browser Aloha, which operates on a privacy-first approach, this week sent an open letter to the World Wide Web Consortium, rallying industry leaders to eliminate “annoying cookie banners” while protecting user privacy. According to the announcement, the “goal of the initiative is to create a new industry standard that gives users more control over their data and simplifies cookie consent management”. Moreover, the company proposed a “one-and-done” solution to address the shortcomings of the GDPR cookie consent process. This involves moving cookie consent management from individual websites to the browser level. In addition, the company pointed out that the specification for Aloha’s solution, alongside an example of its implementation, are open-sourced in Aloha’s public GitHub repository.