Strategic Developments at the Cyprus Stock Exchange
Marinos Christodoulides, President of the Cyprus Stock Exchange (CSE), has emphasized the importance of the bond market’s evolution within the CSE. He pointed out that the introduction of European Medium-Term Notes (EMTNs) from the Republic of Cyprus is a key part of the exchange’s growth strategy. The CSE is moving forward with significant developmental programs and plans, aiming to enhance its products, markets, and services.
Christodoulides underscored the necessity of developing the Secondary Bond Market at the CSE, noting that bond markets are crucial for economic development and investment activity. The recent announcement of introducing EMTNs to the CSE, which began trading on March 27, 2024, marks a significant expansion of the CSE Bond Market’s capitalization, adding over €11.5 billion in value.
The CSE has also established a link with the Swiss Depository SIX SIS to enable cross-border transfers and trading of these bonds. This move is expected to provide investors with additional options for trading international bond issuances.
In a proposal to the Ministry of Finance in 2023, the CSE suggested initiating domestic issuance of a portion of the national debt and introducing it to the CSE. This initiative is set to be implemented by the Ministry throughout 2024, further strengthening the government bonds’ secondary market.
Looking ahead, Christodoulides mentioned the possibility of expanding the bond market to include debt instruments from semi-governmental organizations, public utilities, and local government entities. He also highlighted the CSE’s focus on Green Bonds, with special pricing arrangements to encourage such issuances. The first Green Bond from a Cypriot company was introduced in March 2024.
In an effort to attract more corporate bonds to the CSE, the special defence contribution rate on interest from corporate bonds has been reduced significantly. Additionally, proposals have been submitted to provide tax incentives for new companies considering listing on the CSE as part of a broader tax reform.
The privatisation process of the CSE is underway, with a bill prepared and consulted upon, which is now being finalized for legislative processing. This step is considered vital for attracting a strategic investor with the experience to add value to the exchange.
Christodoulides concluded by reiterating the coordinated actions of the Stock Exchange to position itself effectively in the evolving financial landscape. He stressed that government support is imperative for achieving their goals and transforming the CSE into a primary tool for economic development in Cyprus.
