Morgan Stanley said this week that the uncertainty over Catalonia which has weighed on Spain’s performance has meant that the MSCI Spain has underperformed the EMU by 8% since August. And Spanish SMEs have underperformed by 13%. That said, there is a reason for betting on the Spanish market: it has had the fourth best EPS growth examples.
Standard & Poor’s has announced an upward revision in its long-term credit rating for Repsol from BBB- to BBB. It has also improved its short-term rating from A-3 to A-2, with both ratings assigned a stable outlook. S&P had already improved its outlook for the Spanish oil major from “stable” to “positive” in July, leaving the door open for a ratings upgrade.
According to the stress tests carried out by the Bank of England (BoE), the UK banking system could absorb £50 billion of losses with the capital they have in excess of the minimum requirements. Banco Santander’s UK subsidiary did a good job in the tests.
BBVA has confirmed the sale of its portfolio of property assets, held by its subsidiary Anida and valued at 13 billion euros, to Cerberus. Some 78,000 properties are included in the sale agreement.
Siemens Gamesa has become the second largest turbine supplier in the world after sealing its merger last April, with a 19.3% market share.
After the “war” between Atlantia and ACS for Abertis, now a new counter-bid could be launched to the Spanish market: the one of NH Hoteles’ leading shareholder, China’s HNA (with 28.2% of capital), for the hotel chain which improves on that made by Barceló.
Endesa’s new strategy will improve the group’s long-term visibility and allow dividends to be sustained thanks to its robust cash generation. A minimum dividend of 1,32 eur/share in 2017 and 1,33 eur/share in 2018 has been confirmed. This implies a dividend yield 2018 estimated of 7% (higher than the sector average of 5%).
The Financial Stability Board (FSB) has updated its list of global systemic banks and Santander remains the only Spanish bank in the new classification.
Red Eléctrica de España (REE) plans to put into service in 2025 the underwater electricity link with France. This new electricity interconnection will allow the exchange capacity between Spain and France to increase to 5.000 MW compared with the current 2.800 MW.
The Public Works Ministry has approved a plan to optimise the value of 2000 hectares of land around Aena’s airports. The sale of these lands should provide substantial capital gains and/or rental revenues in a favourable real estate cycle.