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ATL: “Peripheral stocks have been investors’ wisest choice this year”

MADRID | By Jaime Santisteban | Investors looking for a safe heaven who bet on peripheral debt and stocks have seen their profits jump. “Holding Greek 10-year bonds has brought 20% profitability in just 4 months. Portuguese debt is also to highlight. Spanish 10-year bonds (over 6% profitability) are trading at a higher yield than the stock market index,” ATL Capital Strategy Director Marta Díaz-Bajo explains for The Corner.

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Liberbank’s capital increase: connecting the dots

MADRID | By Julia Pastor | Medium sized Spanish entity Liberbank, born from four vanished savings banks hit by the crisis, reflected on Tuesday the renowed interest of foreign investors in Spain’s banking sector. The lender was able to turn its 2012’s losses of €1.8 bn into profits of 48 million in 2013.

Market chatter: Weidmann says ECB must closely watch euro

MADRID | By Jaime Santisteban | The most critical voice about the ECB’s doing something about the euro zone’s persistent low inflation, Bundesbank President Jens Weidmann, said on Monday that the ECB will watch the euro’s exchange rate closely before taking policy decisions. Also, AstraZeneca turned down the allegedly “last” bid offer from Pfizer, worth €8bn.

S&P 500 indisputably overrated

MADRID | By Luis Arroyo | You cannot control financial stability and real economy with just one instrument. I guess the Fed is hoping for excesses to get fixed by themselves, but macro-prudential policy is failing again. Markets are giving their backs to reality. The bad news is that a sudden stop would put us all in hell.


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Did Deutsche Bank plan to go viral right before its capital increase?

MADRID | By Ana Fuentes | If you haven’t watched it, here’s Deutsche Bank’s co-head of corporate banking and securities Colin Fan scolding City traders and trying to convince the world that they’ve done some ménage after the crisis. Remember that the lender paid a €725m penalty to the EU in the Libor scandal; the biggest single fine in a total of €1.7bn charged to six banks.“Being boastful, indiscreet or vulgar is not okay. It will have serious consequences for your career,” Mr Fan warned its staff. Instead of an email, the bank chose the formula of an “internal” video… which went viral just before the German lender started making headlines for its plans of selling €8bn worth of new shares. A plan that is supposed to catapult Deutsche out of the ranks of the worst capitalized banks in Europe -from 9.5 per cent to 11.8 per cent.

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Market chatter: An agreement to soften stress tests conditions for Spanish banks

MADRID | By Jaime Santisteban | European Banking Association and the Bank of Spain agreed to take into account borrowers’ non-property guarantees to assess the situation of Spanish entities in the upcoming stress tests. Bankinter analysts believe that “such guarantees, which are usually pledging of assets like deposits, shares and/or by consignatures, mean a certainty of collection for banks.” Also,  Amadeus has been one of the most attractive values in the Spanish Ibex 35.

Today’s market chatter: Bundesbank opening to QE and much more

MADRID | By Jaime Santisteban | After the WSJ reported that a Bundesbank source confirms the entity would support stimulus measures from the ECB in June, analysts breathed and started making their polls. How big will that support be?

Also, Madrid’s financial circles are debating on the decision of the government selling inflation-linked bonds next week for the first time. Inflation being at record low levels, the decision is not obviously opportunistic, experts commented. Spain wants to look for more public funding options, and this issuances that guarantee the purchasing power of  are usually carried out by France, Germany and Italy, as well as the US.


Nobody waiting for the Federal Reserve

WASHINGTON| By Pablo Pardo | The US private sector already reached the same employment figures it had before the subprime crisis started. This is one of the first solid signs of the so-called Gran Recession at the other side starting to fade. Given that the Federal Reserve has a dual mandate, including price stability as well as full employment, that suggests the still leading world economy- which could become the second after China if the World Bank’s forecast is correct- is beginning to take cruising speed.