In Spain, there has been a kind of urban legend that IPOs don’t work and investors end up losing money. This has possibly been the case in the past, but not now. And perhaps this is because most of the current IPOs are almost exclusively aimed at institutional investors, so operations need to be more fine-tuned.
Articles by Fernando Barciela
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Despite the risks which some people have highlighted with regard to Santander’s absorption of Popular, neither analysts nor investors seem to have been spooked by the massive rights issue launched by Santander last Friday. All in all, it seems the acquisition could be described as something of a dream deal.
Excepting the high speed trains involving the so famous La Meca-Medina contract in Arabia Saudi, and despite authorities and the industry itself have been trying for decades, Spain has been unable to sign even a single high-speed sales operation. This is not, however, the official discourse of any of them.
According to the National Statistics Institute, the most normal average annual gross salary is around 16.500 euros. So once this has been paid 14 times a year and taxes and Social Security contributions have been deducted, this ends up as a little over 800 euros net per month. This sort of income will never drive consumption or housing sales and is not adequate for a European economy like Spain’s.
The Basque region-based industries, like the automotive and aerospace, are global and cutting hedge. They export between 70% and 90% of their production, achieving surpluses for the region’s trade balance, of some 5 billion euros in one of the last few years.
Bankinter, the best Spanish bank, amazed us with its spectacular results during the crisis and continues to do so now. It’s proof that things can be done with maximum prudence, security and moderation, without being pulled along by prevailing bubbles. Bankinter was always cautious about adventures. In the years prior to the eruption of the crisis it established the bases to prevent it from being carried away by what was a catastrophe.
Fernando Barciela | “In the 2008 crisis, the only car assembly industry where production expanded was in Spain. It’s only through crises that you find maximum efficiency. They are good for making everyone react and put every effort they can into improving the production chain. In fact, in CIE we are always going through some crisis or other,” explains Jesús María Herrera Barandiarán, CEO of CIE Automotive.
The Bank of Spain’s report on the financial and banking crisis in Spain has left the sensation that the institution, by action or by omission, has failed in its supervisory responsabilities and allowed practically all Spanish lenders to operate without any kind of control. The worst thing is that situation has continued. The bank has been the but of heavy criticism for how it acted with respect to Banco Popular’s resolution.
Despite the success of the Brexit vote last June, the indicators show that 2016 has not only not been a bad year, but has been one of the best in terms of bilateral Spanish-UK economic relations. Spanish exports reached record highs, despite the pound’s depreciation. And Spanish companies are committed to maintaining investments in the UK.
Spanish banks (and their fund management companies) continue to charge high commissions on their investment funds and pension plans. They can afford to do that because in Spain, the clients are the banks’ clients and they are cautious. So there is little competition in this sector, unlike in the UK.