Today’s market chatter in Spain

BANKIA. Business confidence rose to 118.3 points in 2Q14 ( prior 113.9). In addition to the steady improvement witnessed for a year, financial conditions, capital goods orders and high productive capacity utilisation rates also look up. Productive investment strengthens, key factor for job recovery. Transport and restaurants/hotel industry were the most confident sectors whereas commerce stood on the opposite side.

Also, Bankia forecasts a 90 % increase in Acerinox 1Q14 net profit. Analysts expect a good performance as demand is getting better and nickel prices recover, helping the industry.

LINK and SABADELL. Over 10.1M foreign visitors came to Spain in 1Q14 and 17M are expected in the following term. The UK (1.9M) was the most relevant origin followed by France and Germany (1.6M each country). Hotel National Confederation foresees 62M tourists visiting Spain this year.One-and-a-half million inter-annual growth entaling a historic record.Madrid grows again after two negative years. Price reduction (-3.2 % income/visitor) and Egypt inestabilty benefited Spain.

SANTANDER. BBVA sells loan defaulters portfolios worth €180M to bolster its soundness before AQR/Stress test. Analysts believe BBVA would easily pass the tests with no capital need.

BANKINTER. CVC’s offer for olive oil’s world leader DEOLEO was chosen as it was the most generous one (€0.38/share). Bankia (16.5 %) and BMN (4.8 %) are forced to sell their participations as they received European support during the crisis. Unicaja (11.35 %), Kutxabank (4.8 %) and Caixabank (5.3 %, not forced to sell) will stay to guarantee the ‘Spanishness’ of the company. Government was particularly concerned about it. In view of the offer and the company’s figure, CVC approach is more than appropriate and the future value of the company could lie in acquisitons rather than margin improvements or organic growth.

LINK. Global explosive mixture for equity securities. Steady rises in stocks, tech-bubble of overpriced biotech values in the US, Russian belligerent attitude, fear to weak corporate results and China disappointing economic figures prompt investors to reap benefits and lead stock markets down. Today, US will negatively influence Europe.

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