Morgan Stanley | Our estimates of Naturgy (NTGY) for 2022 are 18% below the objectives set by the company. This is due to our negative vision in LNG and in Latin American currencies.
Bankinter | The ECB has called attention to the evolution of Spain’s fiscal deficit in its Annual Report for 2018, published this week. The impact on the country’s risk premium, currently around 120 b.p. (IRR 1.12%/1.14%), will probably be negative.
Ofelia Marín- Lozano | Interest rates on 10 year sovereign bonds, which are considered “risk free rate”, are at minimum but the European Stock Exchange, the EuroStoxx50 is where it was five year ago, despite the profits have grown by near 60%… Why have they triplicated the risk premium?
The Government of Pedro Sánchez has admitted that Spain will not meet the fiscal deficit targets set by the previous government of Mariano Rajoy. The new targets are -2.7% for 2018 (as opposed to -2.2% before) and -1.8% for 2019 (as opposed to -1.3%).
The Spanish government is facing a motion of censure. In the country’s parliamentary system, if one is presented it requires that an alternative candidate be put forward, who will certainly be the socialist Pedro Sánchez. The debate and the voting will be held on 31 May and 1 June, respectively. Considering the current composition of parliament, Bankinter’s experts provide below the three possible numeric combinations needed for the motion of censure to go through.
In January, Spain terminated its contract with S&P (tired of paying for being knocked done by the ratings agency). S&P then replaced its management team in Spain and now, in March, of its own accord, – because Spain did not ask for the qualification – decided, last Friday, to raise its credit rating on the country by one step, to A- from BBB+, with a “positive” outlook.
Fitch has been the last agency to raise its rating on Portugal to investment grade last Friday. The previous increase from S&P in September already showed signs of the sick person being in very good health. Neighbouring Spain should also see an improvement in its credit quality and be included in the A tranche, at least by S&P and Fitch.
Carax Alphavalue | Up until last Sunday’s events in Catalonia, Spain’s economic recovery was well discounted in market terms, Carax Alphavalue says. But after the Catalan government’s “pretence poll” and the central government’s “heavy-handed” response, investors view Spanish stocks as a more risky bet and less of a buy opportunity for now.
Carax Alphavalue |Santander has made a very strategic move with its recent acquisition of ailing lender Banco Popular, refocusing on its business in Spain as economic growth accelerates. And it’s stock market performance is reflecting this positive story.
Fernando Rodríguez | The Spanish equity market is benefitting from the idea that Spain is one of the eurozone countries which is going to do better. And then there is the effect of low oil prices, which is doubly beneficial for Spain compared with Germany or France.