Today’s market chatter in Spain (focused on Inditex)

BANKINTER. Inditex’s growth reaches maturity stage, however, the company wned by the world’s third wealthiest man, Amancio Ortega, announced shareholders will get a 10% higher dividend. It keeps on working to reduce operative costs.

Key figures in the 2013 results: income added up to €16.724bn (+5%), sales grew by +3%, gross margin totaled €9.923bn (+4%) and the sales area rose by 9 %. Earnings per share (€3.81) was lower tan expected (€3,842). It is the worst profit figure seen since 2009. Despite this fact, Inditex intends to distribute a dividend rising by 10 % to €2.42/share.

Overall, Bankinter considers those results to be somewhat weak. Euro’s strengh, slow domestic recovery, emerging countries slowdown could explain such underperformance. Analysts review recommendation from Buy to Neutral and two-digit profits are not likely any longer.

Business model is sound and is well managed and diversified, enabling the company to keep sector leadership and handsome growth prospects.

LINK. German Constitutional Court validated the bailout fund and the European Stability Mechanism, denying it violates Budestag competences.

BANKIA. Inflation slightly declines (1.1% vs 1.6 %) because of energy. The underlying component stays at 1.6 % in February. The rises in housing and health care compensated transportation, and clothing drops, among others. Little inflation growth is foreseen for the upcoming months.

US housing market shows stabilization signs after recent deterioration. The newly started house figure declined by -0.2 %, much better than January (-11.2%) and December (-7 %). Winter effects might be gone. Construction permit register strongly picked up last month (+7.7%). Builders confidence improved in March as well although there are still more pessimistic.

Bankia forecast an offer increase due to low stock levels and better construction prospects, after crisis experienced in the sector in the last years.

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