Most analysts believe the recovery in the stock prices of Spain’s four big Socimis will continue over the coming months. Between 70% and 80% of all brokerage houses have a buy recommendation. The fact these property investment vehicles have quite high returns and there is very little competition are amongst the positive factors.
China is already the top lender in Latin America, while Spain is the second biggest investor in the region after the US. But joint projects there are scarce.
A lot of matters need to be addressed in Spain’s banking sector in the next four years. Urgent matters are the full privatisation of Bankia and the irrelevant BMN; completing the transformation of the savings banks (La Caixa, Kutxabank, Ibercaja, Unicaja and Liberbank), the adjustment of Banco Popular and the retirement of the post-war bankers.
In 2016, Spain’s Energy Ministry needs to revise the parameters related to the adjustment of green energy premiums included in the 2013 electricity sector reform. The proposal which Energy Minister Alvaro Nadal has sent to the National Competition Commission, pending amendments in order to have it ready before end-year, has not gone down well with green energy producers. They say that the proposal, as it is, limits the premiums and does not allow them to reach the stipulated reasonable rate of return.
The European Commission has recently presented its energy plan for the period 2021-2030. The tightening up on legal security for investors will especially benefit Spanish renewable installations.
Someone like Donald Trump emerging on the world stage threatens to make too many changes in the status quo, some of which will have a particular impact on Europe’s economies and especially Spain. One area which appears likely to progress at a cruising speed in the short and medium-term is Defence spending. This is a particularly sensitive issue and one which Obama already tried to have modified during his mandate.
Germany is a country of travellers. Three out of every four people go on holiday at least once a year. And Spain is their main foreign destination: over 10 million Germans visit the country on an annual basis – spending almost 10 billion euros – running a close second to the number of UK tourists to Spain. Almost half of them travel with a package deal from TUI, world leader in the sector. Sebastian Ebel is the CEO of TUI Germany.
Since the beginning of 2014, the Spanish economy has been recovering from a very tough crisis – unemployment jumped from 8% in 2008 to 26% at the start of 2014 and has now fallen to 18.9%. This is in part thanks to the ECB’s extremely expansionary monetary policy and low interest rates. Now after Donald Trump’s victory, everything could become unstable.
One of the pending adjustments involved in the process of exiting the crisis is related to damaged assets, mainly property. This phenomenon has prevented the Spanish banks from showing off the huge restructuring efforts they have made with better figures.
Spain has been trying to push ahead with two projects which are vitally important for its energy sector: the sale of gas and electricity (basically renewables) to the EU. With practically no positive results to date. In 2012, an agreement was reached with France and Brussels to increase the electricity and gas interconnections with Europe via the Pyrenees. But in spite of that, and the fact the money is already ready there, the investments required are taking much more time to materialise than they should.