Take 5 and come back tomorrow

First of all, let’s be clear. The following is not investment research/advice.?And, as such, it involves no investment recommendations. These are my thoughts on Spanish equity issues, which I find relevant. 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.

Market environment: Withering bloom - (Asia-Pacific markets declined with European futures steady and US ones slightly down) – Asia-Pacific markets declines as expectations regarding the Chinese government rescue package faded and fears of US-China clashes increased. European futures were steady and those for the US slightly down.

Response to the crisis: On the one hand, but on the other… - (Lagarde says that cutting rates is a “premature debate” (Expansion p20) – It would seem that the relatively dovish statements (despite cutting rates being a “premature debate”, disinflation is proceeding, and wage growth is moderating) prevailed over the fact that the rate was held flat and that geopolitical risks abound. The weakening of the Euro would seem to point in this direction. Opening the door to rate cuts is likely to be seen as not good for banks.

Bankinter: Punished for rewards - (FY 2023 net attributable profit of €845m +40,8% on NII of €2.213bn +44.04%, with the higher-than-expected rise in operating expenses leading to a 6% share price decline (Expansion p15) – Despite the sharp rise in profits the stock took the figures badly due to them being slightly below expectations and the strong rise in operating expenses. To the extent that the rise was partly due to high bonuses paid to employees as recompense for the effective marketing efforts (gross addition of 120,000 clients) it should not be a lasting factor.

Viscofan: Going back home - (Announces a buyback of shares for 3% of capital (Expansion p14) – The programme involves 1.4m shares or €76m. Buying back shares is a tax efficient way of remunerating shareholders and sends a message of confidence in the stock.

Banks: Down but slowing - (The number of mortgages granted on homes in November fell19.1% YoY with the average amount of the loan declining by 0.5% (National Statistics Institute)/The average cost of mortgages fell to 3.27% in November from 3.32% in October, the first decline in 10 months, although costs remain above the levels of 2022 and the highest since 2015 (Expansion p19)/Households added €17.5bn to bank deposits in December, the highest of any month of 2023 (Expansion p19) – The decline in the number of mortgages granted on homes decline more than in ?the YTD -17.8%, but it was the first time it has been under 20% since July. It is worth noting that the figures come from the property registry so that they may reflect the past interest rate environment.

*The above information has been read/understood/summarised/evaluated/copied as well as I could to provide a guide to Spanish equities, given available timing/intellectual constraints, and I accept no liability for misreading and/or mistranslating the original copy as set out in my previous article (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.