Nicosia: Total stocks of portfolio investment (PI) assets in Cyprus experienced a notable increase of 10.6% in 2024, reaching a total of £68,958.7 million, up from £62,333.7 million in 2023. This information was revealed in the Portfolio Investment Report for 2024, which was published by the Statistics Department of the Central Bank of Cyprus (CBC) on Tuesday.
According to Cyprus News Agency, the rise in PI assets is attributed to an increase in equity and investment fund shares, as well as debt securities investments by residents abroad. Debt securities assets amounted to £21,482.5 million in 2024, representing 31% of total portfolio assets, an increase from 29% in 2023. Meanwhile, equity and investment fund shares accounted for £47,476.2 million in assets in 2024, making up 69% of total portfolio assets, a slight decrease from 71% in 2023.
The report highlights that long-term maturity debt securities dominate the holdings, with 89% of such securities held in 2024. The primary holders of these long-term securities are the 'Monetary Financial Institutions' (MFIs) and the 'Other Sectors'. The 'MFIs' and 'Other Sectors' saw an increase in long-term holdings by £1,973.2 million and £1,046.4 million, respectively, in 2024. The growth in equity and investment fund shares was driven mainly by the 'Other Sectors', which increased their holdings by £2,634.4 million, notably through listed shares held by 'non-financial corporations' and 'captive financial institutions'.
The key investment destinations for PI assets in 2024 included Russia, the United States, Ireland, Luxembourg, and Kazakhstan, which together accounted for approximately 55% of the total stock. In Russia and the United States, debt securities formed the majority of the portfolio, whereas in Luxembourg, Ireland, and Kazakhstan, equity and investment fund shares were predominant.
Resident investors primarily invested in the 'Other Sectors', particularly within 'Other financial corporations excluding financial vehicle corporations', which constituted 34% of total PI assets in 2024. This was followed by investments in 'non-financial institutions', accounting for 22% of total PI assets. The 'General Government' also played a significant role, comprising 13% of total PI assets.
The CBC report notes a decline in PI liabilities stocks to £18,303.5 million in 2024, down from £19,836.4 million in 2023. This decrease was largely due to reduced non-resident holdings in long-term debt securities issued by Cypriot residents in the 'Other Sectors' and 'General Government'. While equity and investment fund shares remained the main component of PI liabilities, debt securities also held a substantial portion, totaling £8,012.9 million in 2024, down from £10,224.2 million in 2023.
The report also discusses the impact of 'Special Purpose Entities' (SPEs), which are registered in Cyprus but may primarily engage in cross-border transactions. These entities, used as financing vehicles, can distort macroeconomic statistics, including PI statistics. A separate analysis by CBC treating SPEs as non-residents showed a significant reduction in total PI assets by approximately 51% in 2024 and 56% in 2023 compared to when treating SPEs as residents. Equity and investment fund shares experienced the highest impact, dropping to £13,575.3 million when SPEs were considered non-residents.
The analysis also revealed that total PI liabilities decreased to £10,327.9 million in 2024 when treating SPEs as non-residents, compared to £18,303.5 million when treated as residents. The greatest impact was observed in the equity and investment fund shares category, with a decrease of 276% in 2024 and 265% in 2023.