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

Acciona  (+/=) The IPO of Acciona Energía (25% to be placed with institutions before July) which could reach a valuation of €12bn shakes up the renewables map, with the cash proceeds being used to reduce the Acciona €6.858bn debt, with the announced plans having a good market reception as Acciona’s share price is up 16.6% in the last 2 days (Expansion Sat p3)

(+/=) The IPO of Acciona Energía represents an opportunity to accelerate growth. The 2024 target announced in Feb. 2020 was for c.15GW capacity vs. 10.7GW in 2020, and with the IPO this should rise to c.20GW in 2025 (3.0GW in construction/assured and 6.3GW with high visibility, in addition to 9.8GW in advanced development, with exposure to Spain diluting from 53% in 2020 to 37% in 2025), with a further c.20GW opportunities identified through 2030 (Acciona release to the Stock Exchange commission)

(=) 2020 net attributable profit €380m +8% on revenues of €6.472bn -10% and EBITDA of €1.124bn -22%. The outlook for 2021 is for EBITDA +10-15%, 2020 dividend of €3.9/share and 2021 with moderate and sustainable growth and total capex of €2bn in the context of the Acciona Energía IPO (Acciona release to the Stock Exchange Commission)

ACS/Iberdrola  (+/-) ACS prepares a €2.6bn lawsuit against Iberdrola due to alleged illegal surveillance activities (El Confidencial)

Aena  (-/=) Will transfer to 2021 part of the impact of the lack of rentals from shops (Expansion p11)

Banks sector  (=) Spanish banks freeze further mergers until after the ECB stress tests (El Confidencial)

CaixaBank/Bankia  (=) The Government postpones to end-2023 the deadline to sell its stake in Bankia due to lack of market appetite (ABC.es)

Duro Felguera   (+/=) Duro Felguera will sign an agreement with the banks and the Sepi state holding company in less than 15 days (Cinco Dias Sat p4)

Hotels  (+/=) The Minister for Tourism confirms that the Fitur tourism fair will be held in May and it will be the “renaissance of tourism” (Cinco Días sab p8)

(+/=) Melia. Barceló, NH and RIU trust the summer to the acceleration of the vaccination process, noting that there are few bookings for Easter, but trusting in a recovery of demand in summer (Expansion p3)

Investment Strategy (+) The Ibex index rises 1.16% to 8,151 due to the good news regarding vaccine efficacy and for banks the rise in bond yields (Expansion Sat p18)

(+/=) Regional governments will be able to raise their direct aid to corporates to €1.8m per firm after approval by the EU (Expansion Sat p23)

(=) The Secretary General for Industry says that the Government will exit the corporates once the recovery is completed, and that he bets on an entrepreneurial Government that accompanies corporates, being compatible with a liberal state (Expansion p22)

Macro (+/-) The December trade deficit was €1.073bn -48.8% YoY on exports of €22.762bn +0.9% and imports of €23.834bn -3.3% (Ministry of Trade)

(-/=) The Spanish economy begins the year with all of its indicator in the red (Expansion Sat p20)

(-/=) The Social Security Minister announces that furlough programmes see participation rise to 900,000 workers in the first two weeks of February (El Mundo.es)

(=) One third of corporates will not recover their pre-Covid revenues until 2023 (Expansion p23)

Media  (-/=) Advertising fell 24.6% in the traditional market and 11.2% in the digital one in 2020 according to i2P, with TV seeing a 17.4% fall, press a 16.6% decline and radio a 22.9% fall (Vozpopuli)

TMT sector  (+/=) The CEO of Orange in Spain says that he is open to being active in the consolidation of the Spanish market as any merger that reduces competition would benefit Orange, warning that he will be more restrictive in wholesale agreements and will not allow a massive loss of clients (Expansion p10)

Utilities & Ren sector (=) The electricity tariff deficit was c.€1.07bn in 2020 after falling 56.8% (ABC.es)

*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).