Athens-Nicosia: A stock exchange alliance

After years of talks and bargaining, the ‘common platform’ between the stock exchanges of Athens and Nicosia has come to fruition. On October 30 the ASE-CSE common platform went online, giving direct market participants in one exchange market the opportunity to become easily active in the other. The trading functions of both markets run on separate system installations of the same software.
Through this first and unique venture in Europe, thousands of people can now choose the stocks they prefer, enjoying the same speed, reliability and, of course, safety in the execution of their orders. It should be mentioned that this is the result of the common technological infrastructure and services provided by the two exchanges.
The euro is the trading currency at the ASE and for CSE equities, while Cypriot pounds remain the currency for CSE Corporate and Government Bonds.
The development and growth of the two exchanges will be helped greatly by the common platform. In addition to the reduction in the cost of investor participation, the functional and operational expenses of the exchanges are reduced at the same time. It is estimated that in Athens the reduction of cost will reach 10 percent, while in Nicosia it will fluctuate up to 50 percent.
The common platform will strengthen the long-term and good cooperation of companies in the group of the ASE with the Cyprus Stock Exchange, giving at first the prospect of growth in the Balkans and later more widely in Southeast Europe. Furthermore, it gives Cypriot companies the opportunity to achieve a greater international presence.
After the signature of the final agreement, ASE Chairman Spyros Kapralos stated: ‘This is an exceptionally important moment for us, for the project that will boost the accessibility and liquidity of the Greek and Cypriot capital market has become true. I believe that all those who are looking for new investment opportunities in reliable and efficient markets with low access costs are now able to strengthen their presence in the Greek and Cypriot market, taking advantage of the potentialities that the common platform offers. I would like to thank the chairman, the general manager, the head of the project, the managerial team and the staff of the Cyprus Stock Exchange and the Athens Stock Exchange for their hard work.’
CSE Chairman Akis Cleanthous pointed out that the completion of the Common Platform is a main parameter for the full enforcement of the CSE’s strategic plan 2003-2006 and expressed his satisfaction with the achievement of all the CSE’s strategic goals, including the reformation of the institution in Cyprus.

Sources: www.ase.gr / www.cse.com.cy

The Bulgarian miracle

Two months before Bulgaria’s accession to the European Union, the country has proven its ability to exploit every foreign investment opportunity to its advantage.

Greece’s neighbor ranked ninth in world foreign direct investment (FDI) effectiveness in 2005. According to the World Investment Report 2006 of the UN Conference for Trade and Development (UNCTAD), the total volume of FDI attracted by Bulgaria stood at 2.22 billion dollars. 

The United Nations Development Program (UNDP) resident representative to Bulgaria, Neil Buhne, said this is a fact of utmost importance for Bulgaria and its citizens’ future. He added that FDI constitutes almost 50 percent of the gross fixed capital, but there are more challenges related to the country’s forthcoming membership in the EU. For the period 1998-2004, Bulgaria has attracted 226 million dollars in FDI for the tailoring and textile industry, but with its accession, as Buhne explained, the reason for the attractiveness of such investments ― low-paid labor ― will disappear.

At the same time, Bulgaria was becoming an investor in other countries, mainly in the Balkans, such as Turkey, Serbia, the Former Yugoslav Republic of Macedonia (FYROM) and Romania.

Furthermore, Bulgaria is a strategic choice for the attraction of foreign investment not only from Western countries, but also from Eastern and Far Eastern countries such as Russia, China, Singapore and Malaysia.
Worldwide foreign direct investments for Southeast Europe and the Commonwealth of Independent States in 2005 rose, for a second consecutive year, by 29 percent and reached a record figure of 40 billion dollars.

Dimitar Nikolov, representative of InvestBulgaria Agency, pointed out that his country attracted almost 18 percent of its FDI from Southeast Europe in 2005. As he stressed, Bulgaria managed to secure 130 out of the 506 greenfield investments that were made in the region last year. ‘With the proportion of direct foreign investments amounting to 10.8 percent of the gross national product, Bulgaria is placed at the top of the list of countries of Southeast Europe,’ remarked Nikolov. He estimates that next year FDI could reach 3.5 billion dollars.

The president of the Confederation of Employers and Industrialists in Bulgaria, Ivo Prokoviev, explained that the reduction of the corporate tax to 10 percent, as opposed to 15 percent last year, has had a definite positive impact on the attraction of fresh foreign investments.

Sources: www.ceibg.bg / www.unctad.org

A newborn island in the Adriatic Sea

How can a small Mediterranean country with not even 50 kilometers of coastline increase its tourist numbers? Slovenia, which controls 48 kilometers of the Adriatic coastline, has an intriguing answer: Build an artificial island between the coastal towns of Koper and Izola.

The island, one of the projects in Slovenia’s Development Strategy for the period 2007-2023, is expected to be completed by 2020. The total cost of this ambitious program is estimated at 100 million euros. The construction will be financed mainly by European Union funds (60 million euros). The state will contribute 30 million euros, with the remaining 10 million coming from private investors. The island will have an area of 30,000 square meters, which will provide a setting for spa and wellness tourism alongside entertainment facilities and a marina.

The spokeswoman for the Slovenian Ministry of Economy, Patricija Sasek, said that the 3-meter-high island will be constructed from material that will be left over from the construction of a nearby road tunnel.

The only natural island in Slovenia is located on Lake Bled, a popular mountain resort in the northwest of the country.

Fifteen years after its independence, Slovenia has much to expect in the area of tourism, as the number of foreign tourists visiting the country so far this year has proven encouraging. 

In the first seven months of 2006 there were 1,369,250 tourist arrivals who stayed in tourist accommodation in Slovenia and 4,341,275 overnight stays, which is 1 percent more than in the first seven months of 2005. More than 66 percent of overnight stays of foreign tourists were made by arrivals from Italy (17 percent), Austria (15 percent), Germany (14 percent), Croatia (8 percent), the United Kingdom (7 percent), Hungary (3 percent) and the Russian Federation (2 percent).

The share of Slovenia’s gross domestic product from tourism currently stands at 5.5 percent. However, the government hopes to double that figure by 2011.

Sources: www.mg.gov.si / www.slovenia-tourism.si

Environment and energy

Over the last two years, Serbia has proved to be one of the most attractive places in Southeast Europe for foreign investment. Big enterprises and consortiums include Serbia in their business plans because it is a nodal point in the Balkans.

One of those big investments, which will boost the Serbian economy, is the construction of a bioethanol plant in Zrenjanin. The Hungarian-US consortium Biotech Energy will invest 500 million dollars in building the plant, which is expected to be completed by the end of 2009. The project is the largest greenfield investment in the region. According to the business plan, 1,500 workers will be employed in the installations.

The equipment of the factory will be the most technologically advanced of its kind in Europe and will process cereals into bioethanol, a clean fuel which can be used in vehicles with internal combustion engines instead of petrol and oil. 

One million tons of wheat and 500,000 tons of corn will be required annually for the normal running of the plant. In fact, investors are counting on raw materials from across Southeast Europe. It is estimated that 680,000 tons of bioethanol will be churned out each year. It will also produce 400,000 tons of biological animal feed and 100,000 tons of environmentally friendly fertilizers.

Zrenjanin Mayor Goran Knezevic characterized the construction agreement as ‘the undertaking of the century for this part of Serbia, as it will mobilize most of the existing economic resources.’

Biotech Energy head Janos Racz mentioned the infrastructure which will be developed along with the factory, such as a new port on the Begej River that will connect Serbia’s road and rail network with Western Europe, where bioethanol will be exported.

Finally, it should be mentioned that European Union has issued the Biofuels Directive that sets out that non-fossil fuels must account for 2 percent of its diesel market in 2005, a share which will increase to 5.75 percent in 2010 and 20 percent in 2020.

Sources: europa.eu / www.eurativ.com

Compiled by Dimitris Pappas