Investors would rather bet on Spanish stocks instead of bonds

Analysts believe that if Greece avoids default the Ibex might end the year near 12,000 points. If the country doesn’t, the current price (10,900) might suffer in the short term a further loss of at least 10%. Since 2012 lows, the Spanish index has risen in value by 80%.

The Spanish 10-year bond also still has uptrend, although somewhat limited due to some factors which are playing against it. The bond has fallen by 8.4% from its lows of March, a hard setback in barely a few months.

The sudden movement of the curves is not only due to the crisis in Greece, but to the improvement of the economic prospects: a higher growth and a normalisation of inflation.

The virulence of the fall came as a surprise to the majority of investment and pension fund managers but the truth is that by then many of them were already warning about a possible bubble in the bond markets.

The uncertainty in Greece makes it very difficult to be accurate with forecasts. Analysts believe that the time to invest is approaching: the Spanish stock market is now trading at very attractive prices from a fundamental analysis perspective, considering the activity improvement and the expected profit growth.