Cyprus bounces back

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Cyprus crash

The global recession kicked off back in 2008, Europe or to be more exact the Euro zone was at one point on the verge of collapse, yet there was one place within the Euro zone that you could have been fooled into believing no such thing was accruing, that sunny little island on the corner of the Euro map, of course Cyprus. Other than the slight dip in European tourists not much was noticed, that was until the beginning of 2013, when the small ripple that was the global issue came crashing in the form of a tidal wave onto the golden shores of the island of Aphrodite bringing with it a dark and gloomy sky. Banks were closed, ATMs were not working and internet transfers were impossible and it happened almost overnight. Once the dust settled and the rumors and gossip of all deposits being lost had faded the real damage could be assessed, and it did not look good, with two of the largest local banks about to implode there was only one thing that could be done, ask for help. Unfortunately for Cyprus they were not first in the queue and it was becoming a little too common to ask for aid, so the big guys in Europe said, if you want our help first you must help yourself, and that is exactly what happened people with more than €100,000 would lose approximately half of anything over that amount.

The recovery

The forecast was bleak the damage was done, faith in Cyprus and its financial and banking sector was devastated. But with every rising sun, day by day, month by month, things were starting to get noticeably better, one year on and the island was looking better than ever, this event could actually have been the stimuli needed to bring the sleepy Mediterranean island in line with the other EU member states. We are now a year and 3 months on and the statistics are starting to bubble their way to the surface, and to much surprise it’s looking good, yes unemployment is still high at about 16.4% and yes the GDP has still shrank, but less than was predicted, this added to the restructuring of the banks and the compliance with all the bailout terms lead to an increase in the credit rating given to Cyprus.

Return to the market

Cyprus has hired 5 banks, Deutsche bank, Goldman Sachs, HSBC, UBS and VTB capital to set up meetings with investors, formally signaling the return to the global market. April saw the first steps when the island issued €100m of six-year bonds through private placement. The transfer of the ex Laiki banks clients has been completed and Bank of Cyprus has recently announced it will be releasing some of the funds
caught up from the time of the crisis, but also warns that international transfers will still be vetted.

The future of Cyprus

As confidence not only returns but grows with the appetite to bring Cyprus to the leading edge of Europe in various fields such as tourism, finance and oil and gas there are many opportunities for the investor. It is no secret that large amounts of gas has been found offshore which in itself brings great amounts of wealth to the island, but there are no less than 10 major investment opportunities to be had in various locations around the island, not to mention the housing market which although it is at a 7 year low it is on its way back up.