Until the tense situation in the country is resolved, we believe the Spanish stock market will continue to suffer more than its European peers. As an example of this, in the week up until October 4, Spanish equity funds lost $229 million, according to market data firm EPFR.
Carax Alphavalue | Mrs May’s talk of energy price controls sent the UK sector into a downward spin. The Catalan mess also pushed sharply down the Spanish utilities’ share prices. The only surprise is that it took three days for markets to react to the Spanish risks.
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.
Shares in biotech company Oryzon Genomics continued their advance today, after the company said on Tuesday that it plans to move its headquarters from Barcelona to Madrid.
At the moment, the biggest losers in the Ibex 35 index after Sunday’s referendum vote in Catalonia are the banks, particularly the Catalan lenders. Both Sabadell and CaixaBank have acknowledged that if independence were to happen, they would move their headquarters to another autonomous region in Spain. In this way they would keep their access to the ECB’s liquidity and their clients would remain under the protection of the national and European Deposit Guarantee Fund. But perhaps it’s too soon to ring the alarm bells: while the Ibex dropped, other European bourses rose. This shows that Catalonia is still far from becoming a systemic risk for the EU.
A British newspaper asked this question this morning and it’s very pertinent. What has been happening in Catalonia recently puts Spain, a member of the EU, at risk of failure. Essentially what has taken place in Catalonia is the violation of the constitutional order and the rule of law.
The main problem from today onwards is not that Catalonia obtains independence, because there is zero possibility of that happening. It’s rather the weakening of Spain and Europe. Prime Minister Rajoy has the law on his side, but he is politically weak. He needs to look for back up outside, from Europe. But effective support, not notional.
French coverage of the Catalan independence referendum has something of the left-right split we saw in Germany, but most of the media are united in calling on Catalan and Spanish leaders to meet each other in the middle.
Tourism spending in Spain in the month of July totalled 11.902 billion euros, up 16.3% from 2016 and, yet again, beating records. Accumulated spending for the year totals 49.119 billion.
Nick Ottens via Atlantic Sentinel | Accusing Catalan nationalists of attempting to profit from a terrorist attack is not going to change minds. A little empathy, by contrast, and maybe a little bit of compromise, would go a long way.