Market chatter: Spain gloomy jobless rate, Santander 1Q results and much more

Spain lost 184.600 jobs in the first quarter, the smallest reduction since 2008. Unemployment rate rose to 25.93%. The first three months of the year are typically bad for jobs

“Political marketing may urge to emphasize the positive sides, because there is always something positive, and disdain ugly facts. Ostrich strategy, however, based on denying reality though it leads to disappointment and despair,” The Corner’s senior analyst Fernando G. Urbaneja commented.

Santander reported +8% 1Q profits compared to a year earlier. Compared to the prior term the profit went up by 23%. A particularly relevant performance in the context of gradual recovery and very low interest rates in key currencies.  Analysts are also weighing in the bank’s offer to acquire 25% of its Brazilian subsidiary. “The market does not trust our Brazil unit. But we do,” stated one of the bank’s member of the board.

Iberdrola would sell 25% of its distribution business in Spain. The electric corporation allegedly tasked am investment bank with the management of an operation worth €11.5bn. Iberdrola would receive €2.9bn, depending on the debt included in the transaction. Diverse groups have shown interest in the offer. The move is out of 2014-2016 Strategic Plan and was not expected.  It makes sense as long as the company keeps the unit control, Sabadell experts state. Such disinvestment would bring about a 11% net debt drop.

AFI analysts are commenting on global euro appreciation affects lies behind somewhat disappointing corporate results in the eurozone.  In the short-term investment, they recommend high-debt companies (leverage and benefit growth are a favorable mix for profitability, assuming steady interest rates), namely, transport, media, baking, cyclical consumption and utilities sector. Long-term investors are suggested to go for businesses with relevant ability to set prices, high entry barries, good ROE and EPS expectation. Automobile, industry, energy and basic industry are the chosen sectors.


BANKIA. FCC reported losses reduced by 78% and EBITDA significantly bolstered by 72%.  By and large, the figures show a transition within a year that will keep yielding some losses to the company, analysts point out. Results will gradually improve as restructuring plans get implemented and construction and cement activity rebounds.


LINK.  Creditor banks take over the struggling fishing company Pescanova and leave Damm and Luxempart out after being in control.


MORGAN STANLEY. Italian banks are against the ropes and would hardly perform in the stress test. It was the widespread analysis market makers are giving. Today, Morgan Stanley asserted Italian financial sector represents an investment opportunity. They suggest to take advantage of political uncertainty to buy those stocks.


About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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