Cyprus News Agency: News in English (PM), 99-01-20

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From: The Cyprus News Agency at <http://www.cyna.org.cy>

CONTENTS

[01] Cyprus Stock Exchange - Prospects

[02] Parliament - State Budgets - Debate

1600:CYPPRESS:01

[01] Cyprus Stock Exchange - Prospects

Nicosia, Jan 20 (CNA) -- The annual volume of transactions at the Cyprus Stock Exchange (CSE) doubled in 1998 compared to that of the previous year, while prospects for 1999 are very good, CSE Chairman Dinos Papadopoulos told CNA today.

Last week transactions reached record daily volumes with 5,4 million Cyprus pounds on January 13, while the official all-share index closed at 95,54, the highest close in at least 13 months (one Cyprus pound is trading at 2,0 US dollars).

The previous day the Popular Bank Group announced it had reached an agreement to acquire three insurance companies, Paneuropean, Philiki and Interamerican, which were controlled by the Shacolas Group of Companies.

Asked to explain the rally of shares at the CSE, Papadopoulos said it was mainly due to the announcement of the acquisition deal as there was a strong demand for the three companies' shares, because their prices were lower than those the Popular Bank said it would offer.

Papadopoulos described the development as "normal", adding that the demand for shares of the three insurance companies caused higher demand for shares in other sectors, particularly banks.

Referring to the daily volume, he said he expected "the daily volume to fall in the future, but the annual volume will remain much higher than that of last year."

According to Papadopoulos, the 1998 annual volume of transactions reached an all-time record of 347 million pounds and that of the previous year was 170 million pounds.

The daily average for this month is 3,5 million pounds, he said. Two additional reasons for the rally at the CSE are the increased number of tourists expected to visit the island this year and the latest political developments which are favourable to the economy, he added.

Asked about the repercussions of the rally of shares, Papadopoulos said recent developments will affect positively the CSE as new investors are expected to be lured by high returns, while in its turn the Stock Exchange will be able to promote the island's economic development more efficiently.

Another encouraging development is the fact that a number of companies have expressed their intention to seek listing, CSE Chairman said.

Referring to CSE share returns, he pointed out that last year share prices went up by 17 per cent, while the average annual return in the last decade was more than 10 per cent, when bank deposit returns do not exceed 6 per cent.

Cyprus along with Slovenia, Estonia, Hungary, Poland and the Czech Republic started substantial accession negotiations with the European Union in November.

CNA GG/MM/1999

ENDS, CYPRUS NEWS AGENCY

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[02] Parliament - State Budgets - Debate

The discussion will continue tomorrow with speeches by MPs and the final vote is scheduled to take place on Friday.

Estimated net revenue for the 1999 Budgets is 1.106 million Cyprus pounds and the estimated sum of net expenditure 1.707 m. pounds (one Cyprus pound is about two US dollars).

Ruling right-wing DISI party and the United Democrats party have said they will vote in favour of the Budgets, while left-wing AKEL party and centre-right DIKO announced they will vote all three with the exception of some appropriations.

Socialist EDEK has said it will abstain from voting and will only vote for defence, education, social benefits and refugee appropriations.

Eurodemocratic Renewal Party President, Alexis Galanos, who broke ranks with DIKO before last February's presidential elections and supported the reelection of President Glafcos Clerides, said he would vote in favour of the Budgets.

Speaking during the debate, DISI President Nicos Anastasiades said "the government's achievements in the socio-economic field may not have been sufficiently publicised but they are obvious to any objective observer."

He said positive comments made by European Union officials is an indication of the healthy economy and good social standards which exist in Cyprus.

AKEL Parliamentary Representative Andreas Christou told the plenary his party will vote against any budget which does not reflect "our social and economic views" and said economic indicators show "either a negative trend or stagnation".

He described 1999 as a decisive year in the socio-economic field. DIKO Parliamentary Spokesman Tasos Papadopoulos said his party will vote for the Budgets because the island's economy must be reinforced, but pointed out "this does not mean it approves of the overall government economic policy".

He said the deficit in the state coffers has increased further than the boundaries set out by Maastricht criteria.

EDEK leader Vasos Lyssarides expressed concern about the way revenue is secured and allocated and said public deficit and public debt are a cause for concern.

United Democrats President George Vassiliou, whose party participates in government, called for measures to control public expenditure and described this year as very important in the Republic's European Union accession course.

Expenditure for the 1999 Ordinary Budget will reach 1.351 m. Cyprus pounds and its net revenue 1.099 m. pounds.

Expenditure for the Development Budget is estimated at 264 m. pounds. The Relief Fund for Displaced and Afflicted Persons provides for 92 m. pounds expenditure and 7 m. in revenue.

CNA MA/MM/1999

ENDS, CYPRUS NEWS AGENCY

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