A head start in Spanish equities

Also available in Spanish, see next article.

First of all, let’s be clear. The following is not investment research/advice. And, as such, it involves no investment recommendations. These are notes I take to keep myself current on newsflow regarding Spanish equities. I share them freely (and not just as regards price). As always, I am only trying to help. Please read the rest of the “discomplainer (*)” at the end of the article.

Stories in alphabetical order

Banks sector (=) The EBA will submit the banks to a scenario of recession through 2023 (Cinco Dias Sat p9)

(=) Bank of Spain inspector warn that mergers are creating banks that are almost impossible to bail out (El Mundo.es)

BBVA (+/=) 2020 attributable net profit of €1.305bn -62.9% on NII of €15.801bn -7.3%. The Bank aims to pay a 2020 dividend of €5.9/share in cash in April 2021, with the 2021 ordinary dividend based on a 35-40% payout 100% in cash in October 2021 and April 2022, as well as a target of a 10% share buyback once the sale of BBVA USA is closed (BBVA release to the Stock Exchange Commission)

CaixaBank (+/=) 2020 net profit €1.381bn -19.0% on NII of €4.9bn -1.0% (CaixaBank release to the Stock Exchange Commission)

Endesa  (=) Endesa prepares the largest investment in green hydrogen in Spain at €2.908bn (Cinco Dias p3)

Investment Strategy  (-) The Ibex index falls 2.21% to 7,757.5, falling 3.9% in January due to the impact of the mobility restrictions in Europe and the delay in the vaccine rollouts (Expansion.com)

(-/=) Spain only used 26% of available FEDER EU funds in 2014-20 putting in doubt the use of EU recovery funds (OK Diario)

(+/-) According to the Social Security Minister Mr Jose Luis Escriva pension reform it key to access the EU funds and is in Spain’s own interest (El Mundo.es)

(=) The budget deficit through November rises fivefold to 7.82% of GDP with expenditure rising 19% and income falling13% (Cinco Dias Sat p30)

(-/=) Podemos wants self-employed workers and the elimination of the ceiling of payroll tax to contribute €6bn/year more in order to save the public pension system (El Espa?ol.com)

(-/=) The pandemic leaves one out of five companies at immediate risk of insolvency (Cinco Dias p23)

Macro  (=) December retail sales fell 1.5% YoY (adjusted for working days and seasonality) vs. -3.9% in November (-0.6% and -5.9% unadjusted respectively) (National Statistics Institute)

(+/-) The advance indicator for the January CPI shows a +0.6% YoY performance vs. -0.5% in December, with underlying inflation rising to +0.6% from +0.1% (National Statistics Institute)

(+/=) 4Q20 GDP grew +0.4% QoQ (household consumption +2.5%, government consumption +4.0%, gross capital formation -6.2%, domestic demand +1.0% (National Statistics Institute)

Siemens Gamesa (+/=) Siemens Gamesa 1Q21 (Oct-Dec) net attributable profit of €11m vs. loss of €174m on revenues of €2.295bn +14.7% and reported EBIT of €14m vs. -€229m (Siemens Gamesa release to the Stock Exchange Commission)

TMT sector (-/=) The Minister for Public Works negotiates with the telecom companies obtaining extra revenues from the fee for use of roads for the 5G rollout in order to finance road conservation works (El Economista p5)

Utilities & Ren sector (=) The price of electricity collapses due to high wind levels and today (Sunday) will be practically free (El Pais.com)

(=) A decision by the Supreme Court on an appeal presented by the Government against its own rules (correcting an error in the calculation of the remuneration of distribution) will increase the profits of the utilities by over €200m due to correcting payments since 2016 (El Economista p6)

*The above information has been read/understood/summarised/evaluated/copied as well as I could to provide a guide to Spanish equities (as part of a personal research project on the impact of information transparency on the market i.e. “derecho de cita”), given available timing/intellectual constraints, and I accept no liability for misreading and/or mistranslating the original copy (which I urge you to check, as I am only trying to point you in the right direction, I hope). As for what you may decide to do, after reading the above, please contact your legally approved provider of investment advice on Spanish equities. Feel free to copy (but remember to check the original first).