Cyprus-Forum.com

by **purdey** » Tue Oct 07, 2008 1:34 pm

Ok, you guys in the know may be able to advise. While the rest of Europe seems to be suffering from an economic downturn, why is Cyprus still riding high. I see no slowdown in Cyprus on the commercial front, from building through to overall spending.
I realise there is a certain amount of foreign investment in Cyprus but the vast majority seems to be Cypriot based. What is the secret ? or is Cyprus spending more than it has ?

by **CBBB** » Tue Oct 07, 2008 1:45 pm

I know that developers are currently dumping builders due to the dodgy situation and I also know people in the investment industry here that have just been changed from salary plus commission to just commission.

Things can only get worse and anyone that thinks Cyprus will not be affected by the crisis either doesn't know what is going on or just stubbornly refuses to believe there is a problem.

We are quite good in Cyprus at ignoring the obvious!

by **DT.** » Tue Oct 07, 2008 1:54 pm

Marfin Popular Bank just started a 4bn Euro capital increase via private placementas a wa chest for a few bargain acquisitions. Does that sound like we are following the world on this one?

by **purdey** » Tue Oct 07, 2008 1:55 pm

Maybe ignoring the obvious is a good thing short term, at least you are not panicking like the rest of Europe.

by **DT.** » Tue Oct 07, 2008 1:58 pm

purdey wrote:Maybe ignoring the obvious is a good thing short term, at least you are not panicking like the rest of Europe.

Well, there really isn't that much connecting Cyprus with the Credit Crunch. As long as the banks here are still able to hold onto their high deposit levels then they could ride out the storm of the credit drying up. All the other problems that Investment banks have been facing have nothing to do with the Cypriot banks as none of them have prop trading depts, structured products or large underwriting exposures.

I had an inkling that Marfin Laiki might be in trouble due to their shareholder makeup (large collection of US investment banks) but their new capital issue proved me wrong. Dubai financial has obliged once again.

by **CBBB** » Tue Oct 07, 2008 2:10 pm

You are both very optimistic. Most of the loans the local banks have given out are secured on property, if there is no market for property what assets will the banks have when (not if) they call in their loans?

I know the banks have a much better liquidity ratio than in the States and Europe, but it is not 100%.

I know it is all to do with confidence, but if people lose confidence in the system we will be in deep brown stuff.