Central and Eastern European (CEE) countries still face several obstacles to their development and integration, while low institutional investor demand and scarce supply of listed equity/debt securities represent the main issues in the development of capital markets in Cyprus, the CFA Institute reports in its 2018 Central Eastern Europe survey.
The survey was presented by Josina Kamerling, Head of Regulatory Outreach, for Europe, Middle East, and Africa (EMEA) region at CFA Institute in her recent speech, hosted by CFA Society Cyprus, on ‘The Future of Capital Markets in the EU’ at the University of Cyprus.
According to Kamerling, SMEs and small investors still have no easy access to private markets. “The challenges that policymakers should address are information asymmetry, illiquidity and long-holding periods. These aspects do not encourage retail investors to channel their savings into private markets,” she said.
The CFA Institute expects that the next five years will play key role for the development of the EU capital markets, which will link finance to society and become a tool for the economy.
“Developed capital markets would also provide greater investor protection, and create long-term opportunities for investors. Sustainable finance can reconnect investors to finance while FinTech can act as an enabler, if properly monitored,” she added. According to Kammerling, CFA Institute will be actively engaged on these topics in its next 5-year mandate.
Head of Regulatory Outreach at CFA Institute also remarked that CFA Institute conducted a survey on ESG (Environmental, Social and Governance) in 2017, which clearly shows that 75% of the Institute’s members take ESG issues into consideration.
“However, ESG is more widely applied in equity and less in fixed income market,” she added.
According to Kammerling, the CFA Institute encourages all investment professionals to consider ESG factors, where relevant, as an important part of the analytical and investment decision-making process, regardless of their investment style, asset class, or investment approach.