Juan Flames, CEO of BME (the management company of the Spanish Stock Exchange) explains that “Spain has a cutting-edge stock exchange, a leader in dividend yield and, this year, with gains superior to any other European market.”
What a year for the stock market! With so much market volatility, have you missed your time as a manager at Goldman Sachs or Barclays?
I am very happy at BME and very satisfied with this first year leading the company. From an investor’s perspective, volatility is not necessarily a negative thing. Nor is it for capital market infrastructures. Quite the opposite, in fact. What is important is understanding what motivates that volatility, how sudden those movements are, and how capable investors are of managing it. This year, in fact, has been positive for the Spanish Stock Exchange, with a revaluation superior to 41%, placing it at the forefront of financial centers in both Europe and the US. If we add the dividend yield, with a historical average of 4.2%, the Spanish Stock Exchange is bringing a lot of joy to the investment community.
Why do companies represented on the stock exchange in Spain only account for 51% of GDP? What regulatory and fiscal changes are needed?
Any competitive disadvantage penalizes in a context of increasing international competitiveness. For example, the taxation of ETFs, which do not allow for the tax deferral enjoyed by investment funds. That is why we are working with the CNMV (Spain’s National Securities Market Commission) on initiatives such as BME’s new IPO modality, Easy Access, or to repatriate fixed-income issues, which have been fruitful, as programs for issuing international bonds worth an aggregate amount of €46,550 million have been repatriated since 2020.
The White Paper produced by BME detailed four areas of action to encourage companies to list on the Spanish stock exchange. How would you synthesize these concerted actions to spur capitalization in Spain?
Investors find in Spain a leading stock exchange, a leader in dividend yield and with superior gains this year compared to any other European market, with a strong presence of international investors and top-tier technological solutions. The Spanish Stock Exchange is attractive. But we must make it even more so and strengthen its competitiveness. Quite a few of the 56 measures we suggested in our White Paper are related to taxation. Any competitive disadvantage in this regard penalizes the presence of retail investors in the stock market. We view very favorably the debate promoted in the EU by Spain within the European Competitiveness Laboratory to launch a European savings account. That is the way forward.
Some of your proposals have already been implemented.
Yes, some of the measures suggested in the White Paper have already been carried out, such as the possibility for collective investment institutions to lend securities. It was a long-standing request from the industry. There was a competitive deficit that was corrected when the measure came into force in October.
