cyprus stock — Cyprus is encouraged to take a strategic path in the privatisation of its Stock Exchange, as highlighted by Roman Lokhov, chairman of Roemer Capital. In a recent interview with the Cyprus Mail, Lokhov emphasised the potential for Cyprus to develop a robust capital market that could act as a bridge between Europe and emerging economies.
Photo: cyprus-mail.com
Cyprus stock: Potential of Cyprus as a Capital Market Hub
Lokhov, who leads Roemer Capital, a boutique investment firm based in Cyprus, noted that the country possesses the necessary attributes to establish a competitive capital market. “Theoretically, Cyprus could be in a position to establish a really strong capital market,” he stated. He believes that with the right strategic approach, Cyprus can attract international investors and facilitate access for companies from developing regions to the European Union’s financial landscape.
A Multi-Stakeholder Approach to Privatisation
When discussing the privatisation of the Cyprus Stock Exchange (CSE), Lokhov cautioned against allowing control to fall into the hands of a single entity. He advocates for a multi-stakeholder model that incorporates local and international investment banks, funds, brokerages, and depository institutions, while keeping a government presence. “If you want fast and sustainable development of the capital market, one stakeholder is not enough,” he explained. He cited his experience with the RTS Stock Exchange in Russia, which thrived under a similar diversified ownership structure.
Transforming the CSE into a Regional Platform
Lokhov envisions the CSE as a regional platform for companies from emerging markets looking to enter the EU regulatory space. He pointed out that many promising enterprises in regions such as Africa, Kazakhstan, and Saudi Arabia face challenges in accessing international investors. Listing in the EU could provide these companies the transparency they seek. “Cyprus could become a platform where companies from emerging regions are listed under European law,” he remarked, highlighting the geographical advantages Cyprus offers.
Building a Comprehensive Financial Ecosystem
For Cyprus to realise its potential as a financial hub, Lokhov stressed the importance of developing a comprehensive financial ecosystem. He pointed out that the lack of depository services currently hampers growth, as most institutions rely on custodians abroad. “One of the strategic goals should be to bring this business and infrastructure into the country,” he stated. He believes that all segments of the financial ecosystem, including investment banks, institutional brokerages, and retail brokers, must be engaged to create a dynamic market.
Shifting Perceptions of Cyprus in International Finance
Despite improvements in Cyprus’ reputation in recent years, Lokhov acknowledged that challenges remain in changing perceptions among international financial institutions. “Some conservative banks in countries like Germany and France still hesitate to open accounts for Cypriot companies,” he noted. He believes that firms like Roemer Capital, which prioritise compliance and transparency, can help shift this view. The firm is regulated by CySEC and audited by PwC, demonstrating a commitment to high standards.
A Vision for the Future of Capital Markets
Lokhov argues that Cyprus needs a long-term national strategy for capital market development, similar to Saudi Arabia’s Vision 2030. He suggested that Cyprus should articulate clear goals and timelines for its financial sector, including the enhancement of depository services and investment banking. “There is no unified roadmap that says, this is where we want to go, and this is how we will get there,” he said, emphasising the need for coherence in efforts among regulators, government agencies, and private entities.
Encouraging Dialogue Among Market Participants
To strengthen communication with the government and regulators, Lokhov proposed the creation of an independent association for capital market participants. This forum would bring together brokers, banks, funds, and the stock exchange to discuss challenges and opportunities in the market. He believes that such a dialogue could foster informed decision-making regarding regulatory reforms and market priorities.
Leading by Example
Roemer Capital aims to lead by example in fostering the growth of Cyprus’ capital markets. The firm has already begun producing research on local banks, hosting investor roadshows, and facilitating trading in Cypriot equities for major international investors. “For a Cypriot investment firm to connect international institutional investors with local assets is a significant step,” Lokhov said, highlighting the importance of these initiatives in demonstrating Cyprus’s potential.
The Unique Opportunity for Cyprus
As Lokhov concluded, Cyprus stands at a unique crossroads, with the potential to build a remarkable financial hub. “It has the regulatory base, the geography, and the people. What it needs now is a shared vision and the courage to act on it,” he stated. With strategic moves in the privatisation of the CSE and a comprehensive approach to capital market development, Cyprus could transform into a significant player on the global financial stage.
