The Spanish economy fell by 11% in 2020 as a result of pandemic’s impact on activity, an unprecedented slump in peacetime. It is also the largest annual contraction since statistical data has been recorded, thus ending six consecutive years of growth, according to the National Institute of Statistics (INE). The fall of the economy in 2020 is slightly below that forecast by the Government (11.2%).
Last Tuesday, Spain’s government held the long-awaited auction of 3,034 MW of new renewable licenses with a high level of participation. A total of 84 companies made bids, reaching 9,700 MW, which is three times the power offered. The megawatts allocated were distributed amongst 32 business groups. By technology, 2,036MW were awarded in solar photovoltaic and 998 MW in wind. Meanwhile, the weighted average price was 24.47 €/MWh for solar PV and 25.31 €/MWh for wind.
The Spanish tourism sector has suffered a dramatic drop in activity of around 70% in 2020 due to the coronavirus crisis. . The last available data, the overnight stays in hotel establishments, confirm just that. They fell by 73.3% in 2020 to 91.6 million, while room rates fell by an average of 6%. So the industry’s recovery depends, partly, on the receipt of European funds. And 70 tourism companies have proposed a project to the government to attract €5.8 billion in European aid.
Telefónica and Liberty Global reached an agreement in early May last year to merge their UK businesses and create the market-leading fixed and mobile operator in the country. According to the UK Competition and Markets Authority (CMA), the combination of Telefónica subsidiary and Virgin could lead to higher prices for wholesale fiber and mobile services. Thus they announced an investigation into the merger and its possible consequences before giving the go-ahead to the deal.
The International Monetary Fund updated its estimates on Tuesday, attributing a GDP growth for Spain of 5.9% in 2021, down from 7.2% in its October projection. This is a significant difference with respect to the 9.8% forecast of the Spanish government, on which the Budget approved last December is based. In fact, the macroeconomic accounts presented in October by Pedro Sánchez pointed to projections of an inertial expansion of -11.2% on a yearly basis in 2020 and +7.2% for 2021 (+9.8% including the Recovery Plan).
Chinese investment in Spain increased in 2020 – amid the pandemic and in a context of a general decline in Chinese investor appetite in Europe – reaching 370 million dollars. This represents an increase of 362% compared to the modest 80 million dollars of investment in 2019, according to the study published by Baker McKenzie. The data related to Chinese companies’ investment in Spain during 2020 is mainly driven by China Railway’s takeover of a stake in Aldesa, valued at $277 million.
Global InfraCo, owned by Australian fund IFM Global Infrastructure, has announced a voluntary and partial tender offer for up to 220 million shares in Spanish energy company Naturgy, representing 22.69% of the firm’s share capital. The offer price is €23 per share, which is a premium of 28.9% over the volume weighted average price of Naturgy shares for the last six months and 19.7% over Naturgy’s share price at yesterday close. For Bankinter’s analysis team, the offer is “attractive for minority shareholders”.
Allianz Global Investors presented the Dividend Report 2021. According to the study, after falling to just under €290 Bn in 2020, compared to €360 Bn a year earlier, due to the coronavirus crisis, dividend distribution is likely to rise again in 2021 to about €330 Bn. Whatsmore, pre-crisis levels will not be reached before 2022. The report also shows that, despite the health crisis-related downturn, dividends in Europe continue to contribute substantially to equity returns. Spain is the leading market for dividend yields in the Eurozone.
CAF could have withdrawn from buying the factory that Alstom has in Reichschoffen (Alsace, France). The European authorities are forcing the French company to sell in exchange for giving the green light to the 5.3 billion euros acquisition of Bombardier’s railway business. This purchase will be executed on January 29. On January 8, Alstom seemingly informed the trade unions of this plant that CAF was not interested in the situation of the operation.
The housing stock in Spain would be estimated at 4.1 billion euros in the hypothetical case that all the homes were now on the market, which is a figure over three times higher than national GDP (1.2 billion). This is according to a study by the real estate website Idealista, in which all the houses recorded in the property register are valued at current prices.