European economy

Stock markets

Spanish GDP Is Still Below Pre-Covid Levels, -3.2%, and So Are Corporate Profits, -6.2%

Spain’s GDP remains -3.2% below pre-pandemic levels, after its historic fall in 2020 (-10.8%). It is last in the EU in terms of GDP recovery and also in terms of business profits: Spanish companies are some 11 points below the European average and, together with Portugal (-6.3%), Spain is the country showing the worst rate of recovery in business profits, which are still 6.2% below pre-covid levels, according to the…


Inflation

Europe Fails To Address Inflation

Juan Pedro Marín-Arrese | Blaming Putin for the current inflationary bout no longer holds. No one disputes that sanctions aimed at crippling the Russian economy following the aggression on Ukraine have made the prices of vital commodities skyrocket, mainly due to wild speculative movements. Nowadays, we are witnessing sharp falls in raw materials while prices gather further momentum. Thus, claiming we only face a cost shock from such products seems…


Putin

Sanctions on Russia? The current account surplus rose to USD 110.3 billion in May 2022, up 244% from May 2021

Crédito y Caución (Atradius) | Owing to the war in Ukraine and sanctions on Russia, Eastern Europe is likely to see a 0.6% contraction of GDP in 2022, followed by 1.1% growth in 2023. We forecast that the economy of Russia will contract by 8.0% in 2022, followed by another 2.8% decline in 2023. Sanctions deprive Russia of much-needed industrial components. On the other hand, Russia still exports large quantities…


boris jonhson

Goodbye Boris, Goodbye

Brexit – the United Kingdom’s exit from the European Union – was the great political attraction of Boris Johnson’s era as British Prime Minister. However, its effects have been disastrous for international trade, especially for Spain. As the daily Expanión explains, Brexit, Boris Johnson’s great electoral claim, has taken away 18 billion euros in trade between the United Kingdom and Spain. In 2021, the first full year of Brexit, UK…


Stainless steel

We still prefer carbon steel vs stainless steel; ArcelorMittal (Overweight) and Acerinox (Equalweight)

Morgan Stanley | The steel companies have historically done badly in recessions. Currently, with the risks of recession on the rise, margins at spot price continue to weaken and we have seen an important derating. It is likely that delays in prices support Q2 profits, but we see a significant slowdown from the next quarter. We still prefer carbon steel to stainless steel. ArcelorMittal (OW): we expect the company to generate…


Cellnex

Deutsche Telekom’s decision on the sale of its towers could be revealed this week

Renta 4 | According to Bloomberg, the consortium formed by KKR, GIP and Stonepeak would be tabling a more attractive offer for Deutsche Telekom’s towers than that presented by Cellnex and Brookfield. The possibility that Vodafone, via its affiliate Vantage, and even American Tower, have already withdrawn from the process, also appears to be ruled out. The news report says that Deutsche Telekom’s decision could be revealed before the end…


Nuclear energy in Spain

Even In Gas Crisis, Germany Refuses Nuclear Power

Nick Ottens (Atlantic Sentinel) | Germans are urged to ration gas. “We are in the midst of a gas crisis,” according to economy and climate minister Robert Habeck. “From now on, gas is a scarce asset.” Russia has reduced supplies to what is its largest customer in the EU in anger over the bloc’s support for Ukraine. All consumers, whether in industry, in public institutions or private households, should reduce…


Repsol

Repsol and Ardian bid for majority stake in PLT Energía

Renta 4 | Repsol would be interested in buying Italian renewables company PLT Energía. Repsol and the French fund Ardian are bidding for a majority stake in the Italian firm valued at 1 billion euros, according to press reports. In the event the possible purchase happens at some point in the future, it would mean Repsol disembarking in the Italian energy market. Swedish fund EQT would also be interested in…


Iberdrola

Iberdrola commits to maintaining its €3.5 B investment in the UK despite new regulatory framework

Link Securities | Iberdrola has committed to maintaining its planned 3 billion pounds (some 3.5 billion euros) investment in the UK. This is despite the new regulatory framework proposed for network operators in the country which limits profits, according to a report in Expansion. The Spanish electricity company explained on Thursday that it plans to continue to drive energy transformation in the UK as part of its transition towards an…


Heathrow Ferrovial

UK regulator proposes cutting Heathrow landing charges

Bankinter | The UK’s Civil Aviation Authority (CAA) has proposed that the landing fees at Heathrow be cut from 30.19 pounds per passenger to 26.31 pounds in 2026. This would imply a 2.6% annual decline over the next five years. The CAA believes this will allow for a balance between allowing the aiport to invest in infraestructure and maintaining fees at levels which customers can afford. Bankinter analysts team’s opinion:…