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Markets 2nd January 2017

The First Week Of A New Year, Traditionally Volatile In Market Indices

The first week of a new year is traditionally volatile, with a huge dispersion in the performance of the market indices. This can be seen clearly in the first 5 sessions of the Ibex 35 over the last few years: 2010 + 1.87 % ; 2011 – 3.03 % ; 2012 – 3.24 % ; 2013 + 3.50 % ; 2014 + 3.4 % ; 2015 – 1.6 % and in 2016 – 6.65 %. Independently of this very short-term positioning, Bankinter believes that 2017 will be the year for equities.

iberdrolaTC

Ibex 30th December 2016

Iberdrola: addressing latest questions from investors

UBS | Based on our latest conversations with investors, the following three questions emerged on Iberdrola: Could we see EPS growth upgrades following the strategic update on Feb-2017? Could renewables growth plans in the US be at risk? And, Is the company likely to pursue inorganic growth as suggested by recent press articles?

REE-grids

Markets, Spanish Small & Mid Caps 29th December 2016

Refreshing Our Thoughts on REE: More Domestic Energy Policy Risk

UBS | REE delivered an impressive annual total return of over 20% in the past 5 years. This was driven by EPS growth, supportive regulation and above all, falling sovereign bond yields. The trend however was halted this year as bond yields recovered and yield expansion impacted the stock – a risk which continues to keep us cautious on REE, and on regulated names in general.

Monte dei Paschi bailout

Markets 28th December 2016

Does Monte dei Paschi bailout comply with EU regulations?

The German authorities have come out en masse to criticise the public bailout the Italian government is planning for Monte dei Paschi. For many observers, this decision implies “direct public aid” which goes against the European directive on banking solutions and restructurings.

Socimis' boom

Markets 27th December 2016

Will the Socimis recover? Everyone thinks they will

Most analysts believe the recovery in the stock prices of Spain’s  four big Socimis will continue over the coming months. Between 70% and 80% of all brokerage houses have a buy recommendation. The fact these property investment vehicles have quite high returns and there is very little competition are amongst the positive factors.

US infrastructures

Markets, World economy 24th December 2016

How Could A New Wave Of Infrastructure Spending Impact The Construction Sector?

UBS | As attention turns towards fiscal stimulus as a means to drive global growth, infrastructure investment is considered a politically feasible way to justify government spending. Despite increased focus, however, deploying additional meaningful funds for infrastructure spending is never easy. The US infrastructure, for instance, has received intermittent attention over the last several years.

Bonds and pricing

Markets 23rd December 2016

Mature bond markets: the mirror image of 2016

The bond market started this year with euphoria and ended with losses, for 2017 we see the mirror image. Bond investors should keep the powder dry and only buy duration when yields are clearly overshooting.

Ferrovial-Toronto

Ibex 20th December 2016

Ferrovial Still 407 ETR Dependent

Carax- Alphavalue | 2016 is no great vintage for Spanish group Ferrovial (Add, France) which spent the year sailing into headwinds including the bankruptcy of one of its US toll roads in March, Brexit in June (36% of sales are generated in the UK) and the widening of South European sovereign spreads from October.