Cyprus Investment Firms Witness 53% Decline in Assets amid Geopolitical Disruptions

<p><span>The Cyprus Securities and Exchange Commission
(CySEC) has released its Annual Statistical Bulletin for 2022, highlighting an overview of Cyprus' financial landscape. Despite a slowdown in the global
economy, the market for regulated
entities (REs) showed resilience. </span></p>
<p><span>CySEC's 2022 report disclosed a notable rise of 4%
in the number of REs under its supervision. This surge was a result of an
upswing in fund management companies and Cyprus Investment Firms (CIFs). However, the number&nbsp;of listed companies and administrative service providers (ASPs)
remained unchanged. </span></p>
<p><span>Between 2021 and 2022, there was a drop of 2% in the
number of CIFs. By the close of 2022, the cumulative number of CIFs stood at
225. </span>While the total number of <a href="https://www.financemagnates.com/tag/cyprus-investment-firm/" target="_blank" rel="follow">CIFs</a> declined
year-on-year, the number of clients surged by 26% to 4,147,949, partly due to&nbsp;market
growth and changes in client reporting post-Brexit. Across all the segments, the number of clients peaked at 4,175,826.&nbsp;</p>

<h1><span>Cyprus' CIFs Post Mixed Performance</span></h1>
<p><span>CIFs emerged as a dominant force, boasting a
staggering 99% share of the client base in 2022. This marked a substantial
upswing from previous years. However, despite this substantial growth,
CIFs faced a reduction of 53% in total assets.</span></p>
<p><span>According to the regulator, this trend is attributed
partly to geopolitical disruptions and the fluctuation in currencies. Nonetheless,
amidst these challenges, CIFs saw an increase of 14% in trading income.</span></p><figure data-media-><img src="https://images.financemagnates.com/images/Total%20number%20of%20clients%20for%20years%202019-2022_id_b351cf82-05c3-4fe8-8362-b521063d2b1f_original.jpg" width="1200" height="1200" wrapper-="wrapper-" data-src="https://images.financemagnates.com/images/Total%20number%20of%20clients%20for%20years%202019-2022_id_b351cf82-05c3-4fe8-8362-b521063d2b1f_original.jpg" /></figure><p><span>CIFs' total assets reduced to €4.9 billion in 2022,
compared to €10.5 billion in 2021. The conflict in Ukraine reportedly played a
significant role due to sanctions and reduced operational volumes. Currency fluctuations, particularly the deviation in EUR/USD <a href="https://www.financemagnates.com//">exchange</a> rates,
affected CIFs with assets denominated in USD.</span></p>

<h2><span>Geopolitical Factors and Market Trends</span></h2>
<p>The withdrawal of a considerable amount of CIFs'
assets denominated in Russian rubles contributed to the decline, as
firms aimed to minimize their exposure to this specific currency amidst market
uncertainties, <a href="https://www.financemagnates.com/tag/cysec/" target="_blank" rel="follow">CySEC</a> noted in the report.&nbsp;</p>
<p><span>Interestingly, 23.4% of total investments were
directed toward Cyprus, predominantly channeled into Private Equity (70%) and
Real Estate (13%).</span></p>
<p><span>The locally listed companies in Cyprus witnessed a
downturn, experiencing a reduction of 16% in numbers from 2019 to 2022. Despite
this slump, many of these companies traded in the Alternative Market, with a
notable presence in the financial services (27%) and travel and leisure (19%)
sectors.</span></p><p><br></p>

This article was written by Jared Kirui at www.financemagnates.com.