The Spanish stock market has become less attractive to investors, according to the latest data published by one of the country’s leading brokers, XTB. Despite doubling its volume of active clients in equities during 2021 compared to 2020, a clear change of trend in the Spanish market is being observed. The number of investors who only operate in the domestic market has decreased by 35% last year, while the number of those who only operate in international markets stood at over 40% of the total.
These figures coincide with those of Bolsas y Mercados Españoles (BME), the Spanish stock market operator, which in its annual report revealed a 19% drop in the volume of orders, to 45.1 million. The accumulated trading volume also fell by 11.9% to 378.12 billion euros, the worst figure since 1999.
The entry into force of the Tobin Tax, together with the poorer performance of the Spanish stock market compared to others and the growing ease of investing in other markets, are the main reasons for this situation. On January 16, 2021, this new tax came into force, which levies a 0.2% tax on all transactions involving the purchase of Spanish shares whose market capitalization exceeds 1,000 million euros. As already occurred in France and Italy, the appearance of this tax has discouraged investment in the securities subject to it, causing falls in trading volumes and capital outflows abroad.
At the same time, the revenue generated by this new tax is far from the forecasts announced for 2021. Specifically, up to the beginning of November, 237 million euros were collected thanks to this measure, which represents 27.8% of the 850 million euros expected by the Government for the whole of 2021. Last year, the tax was applied to some 60 companies on the national stock exchange and it was the large stocks that generated the most revenue with this new tax figure.
A large part of this volume has been transferred to other foreign markets that offer better profitability and are not subject to this type of tax. However, there has also been a notable increase in other investment vehicles such as derivatives, investment funds and ETFs or exchange-traded funds. According to data published by Inverco, investment in ETFs grew by 8 billion euros in 2021, 19% more than the previous year and already exceeds 50 billion in Spain.
The other determining factor in the decline in the universe of investors in the Spanish stock market has been the performance of the domestic market, which continues to fail to achieve the rises seen in the rest of the markets. In 2021, the IBEX 35 ended with a return of 7.93%, while other benchmarks such as the German DAX recorded gains of 15.79%, or as much as 27.23% for the US S&P 500. If we extend the reference horizon to the last three years, the Spanish selective index obtained a negative return of 2.71% in the period, while the German index rose by 41% and the US index by 71%.