Spain

Corona Capital: GE, Oaktree, M&A back doors

1 Apr 2020

Concise views on the pandemic’s corporate and financial fallout. GE delivers its own form of cash injection, hedge fund boss Howard Marks praises heavy-handed Covid-19 responses, and a car-parts maker flirts with bailing on a deal.

Scrap bank dividends to help save the world

24 Mar 2020

Spain’s $39 bln Santander may pause 2020 payouts, freeing up capital to support lending amid the pandemic. A more radical move would be for banks to all cut 2019 dividends. Investors need cash less than virus-hit firms, and U.S. and European share prices already factor in a hit.

Short-selling bans are no cure for virus rout

13 Mar 2020

A pandemic-induced market crash prompted Spain and Italy to curb trading on some hard-hit local stocks. The measure, also used to protect bank shares in the 2008 crisis, looks rushed and won’t help much. Real panic selling rather than speculation is what’s roiling markets.

Spanish banks get slightly lighter loan albatross

3 Mar 2020

EU judges have ruled that local courts can resolve a dispute over unfair floating-rate mortgages. That could spare Spanish lenders billions of euros in potential losses. The catch is that the same loans are increasingly unprofitable as rates head south.

Spain tweaks the odds on Blackstone’s property bet

18 Feb 2020

The left-wing coalition led by Pedro Sanchez wants to control rents on residential property. The move may depress house prices, up by one-quarter since 2014 thanks to a booming economy. Investors like Steve Schwarzman’s firm may be tempted to take some chips off the table.

Only capital can fix Santander’s discount

29 Jan 2020

The Spanish lender’s return on equity fell in 2019 due to one-off costs, but it should do better this year. Still, the bank run by Ana Botin has yet to hit a 12% solvency target, which in turn lags European peers. Until it catches up, its lowly valuation will persist.

Santander CEO fiasco exposes banking’s fault line

16 Jan 2020

It’s a year since chair Ana Botin reversed her decision to make UBS executive Andrea Orcel the Spanish group’s boss. Misgivings about pay and management style were rooted in the gulf between wholesale and retail lenders. A 112 mln euro lawsuit will lay bare the culture clash.

IAG dealmaking will outlast Willie Walsh

9 Jan 2020

The Irishman is disembarking after nine years at the helm of the BA and Iberia owner. The holding structure he led from its birth has been more successful than Air France-KLM and makes it easier for his successor to go shopping, say for a carrier that flies to South America.

Telefonica’s self-activism is half a turnaround

28 Nov 2019

The Spanish phone firm is trying to revive its flagging fortunes before somebody else makes it. Carving out the sprawling and sluggish Latin American operations makes sense, if it leads to a sale. A real activist would demand more clarity on disposals, growth forecasts and costs.

Euronext’s Spanish journey looks tortuous

22 Nov 2019

Stephane Boujnah, the exchange’s acquisitive boss, may try to trump Swiss rival SIX’s 2.8 bln euro bid for Madrid-based peer BME. A higher offer may clinch the deal, but would test Euronext’s financial discipline. Appeasing local politicians would also come at a cost.

Swiss bourse buys costly ticket to EU trading room

18 Nov 2019

Zurich-based exchange operator SIX is offering 2.8 bln euros cash for Spain’s BME, which is also being courted by rival Euronext. Building up scale makes sense. But extracting savings to justify the 34% premium may be challenging. It’s an expensive way to gain an EU foothold.

Spanish instability numbs markets into complacency

11 Nov 2019

Bonds and stocks barely budged after Prime Minister Pedro Sanchez failed to win a majority in national polls. Forming a government will likely mean striking a deal with far-left and pro-Catalan parties. With growth slowing and high debt levels, it’s hard to square investor calm.

Vestas buttresses Denmark’s wind-power primacy

7 Nov 2019

The Copenhagen-listed turbine maker’s order books have bulged to 33 bln euros. More importantly, margins are withstanding the buffeting of subsidy removals, unlike at rival Siemens Gamesa. Alongside operator Orsted, tiny Denmark is king of the $1 trillion wind business.

Ryanair’s ascent could yet hit a 737 MAX ceiling

4 Nov 2019

The European budget carrier’s shares have soared, mainly since a price war is proving less painful than feared. Yet darker clouds lie ahead. Delays in reviving the troubled jet are crimping growth in passengers. Without the more efficient plane, costs will be harder to control.

Cellnex adds UK piece to Europe phone-mast jigsaw

8 Oct 2019

The Spanish firm has snapped up 7,400 British mobile phone towers for 2 bln pounds. At 270,000 pounds per mast the price looks decent compared with other deals. Once Cellnex adds Germany to its map it will have to rely on earnings growth, not acquisitions, to underpin its value.

Berlusconi puts Bolloré in a corner at Mediaset

20 Sep 2019

The Italian tycoon has found a clever way to thwart his French rival’s attempts to kill Mediaset’s merger plan. Small fund Peninsula has agreed to put up the almost 1 bln euros needed to buy out Vivendi. The surprise move gives Berlusconi the upper hand in the ongoing struggle.

Spain turns Italian as economic fault lines widen

18 Sep 2019

The fourth election in four years follows Prime Minister Pedro Sanchez’s failure to form a government. Unlike in Italy, bond investors have shrugged off Spain’s dysfunctional politics. But gridlock has left debt high as growth dips, while the Catalan question remains unsolved.

Telco M&A gets rare regulatory boost in Brazil

16 Sep 2019

The country may treat operators including Oi, which is in bankruptcy protection, with a lighter touch. That gives local units of Telefonica and Telecom Italia reason to pounce. Official support for M&A is a welcome relief from the constraints facing their European parents.

Inditex high street reign comes with higher bar

11 Sep 2019

The Zara owner’s strong first-half sales growth was overshadowed by downward pressure on its gross and operating margin in the second quarter. Investors’ concern about the cost of growing revenue may be valid but a widening valuation discount to peer H&M seems harsh.

Spain will soon face tab for policy stasis

27 Aug 2019

Prime Minister Pedro Sanchez has spent four months unsuccessfully trying to secure a parliamentary majority and may have to call another election. Political gridlock mattered less when the economy was doing well. Now it will hinder Madrid’s ability to combat slowing growth.