Morgan Stanley | Merlin trades persistently with a discount against its counterparts while offering one of the most interesting return growth profiles (15-20% total return) among those who give a 20% discount.
J.L.M. Campuzano (Spanish Banking Association) | Companies and families have continued reducing their debt levels, down to 131.2% of GDP. Ten years ago their indebtedness exceeded 200%.
The average price of housing in Spain in 2019 increased by 3.6% last year. Only in December it experienced an increase of + 1.2%, according to the real estate valuation company Tinsa. The Mediterranean coast accumulates three consecutive months of price falls.
Spain CPI stood at + 0.8% in December, following estimates and preliminary data. This means an increase of + 0.4%. In fact, inflation in Spain remains below the EU’ average (+ 1.3% in December), which allows the country to continue gaining competitiveness via prices.
Link Securities | According to Moody’s credit rating agency, the sharp decline in consumer confidence in Spain during 2H19 reflects the growing concerns of Spaniards about the economy and employment. The agency believes that consumer confidence data represent an advanced indicator of the increase in the risk of assets and the consequent deterioration of the evolution of securitized loans.
The first ministers cabinet meeting in Spain on Tuesday approved the rise in pensions by 0.9%. The increase will be applied retroactively from January 1 and will affect more than 10 million Spaniards, both contributory and non-contributory and passive class pensions. It will cost the Spanish coffers 1.4 bn euros.
Fernando G. Urbaneja | Critics warn that the first Spanish coalition government will be a weak and incoherent one. That can be an advantage. Some call it a radical government of “communists” who come to resurrect ghosts of the past. If those guesses are not met, the cabinet will get a clear push forward.
Alvise Lennkh (Scope Ratings) | It is unlikely that the minority government led by the PSOE significantly reduce the structural deficit and debt of Spain, while the proposal for partial repeal of previous labor market and pension reforms could adversely affect employment and sustainability of the pension system. This government coalition does not have a parliamentary majority and, therefore, depends on the support of other parties to pass each law, starting with the next general budget, which will be crucial for the credit rating of Spain (currently in A- / Stable).
Ana Fuentes | The recently appointed coalition government is facing the biggest constitutional crisis of Spanish democracy. With almost half of the parliament against, in addition to criticism within his own party, PM Sanchez has launched an all or nothing bet. If he manages to take a part of Catalan pro-independence supporters to the constitutional path, and ERC renounces unilateralism as Basque separatism did, this will be an achievement for posterity. But the play may go wrong for the Socialists, and it would not be the first time.
Telefónica’s decision to reduce its reliance on Huawei is in line with the company’s strategy to have several different providers for the equipment for its 5G networks, which is expected to be widely deployed by 2022.