Spanish equities, cheap and paying good dividend
According to Bank of America, the Spanish stock market is not expensive compared to the last 15 years in terms of price-to-earnings ratio. The Bank says that profit downgrades were the smallest during the global financial crisis, which makes Spain’s benchmark index, the Ibex 35, cheaper than the British, German and Italian stock markets.
At the same time, Spanish listed companies are handing out succulent dividends. In January, shareholders received more than €2 billion, up to 52.6% more than the previous year. This is the highest January figure since 2019, before the pandemic. Profit growth is expected to allow companies to even raise their dividends more later this year.
Political dispute over restrictions on foreign takeovers
The controversial curbs imposed by the current left-wing Government over foreign takeovers of Spanish companies could have its days numbered. Opposition leader, Alberto Núñez Feijóo, from the conservative Popular Party, has promised some Ibex 35 executives, with whom he has met in recent days, that if he is elected president in the general election scheduled for the end of 2023, he will overturn the so-called anti-take-over bid law.
This regulation was enforced by the Socialist Government back in the pandemic as the Spanish stock market plummeted and local companies were very affordable. The Government gave itself a vetoing capacity to deals from foreign investors that were trying to acquire more than 10% of a listed company which was considered as operating in a strategic sector.
The Spanish government recently extended the Law until the end of 2024.
Spain, among the most attractive countries for real estate investment
Spain is the fourth most attractive European country to invest in real estate, according to the Investor Intentions Survey 2023 conducted by the consultancy firm CBRE. Spain has climbed three positions in that rank and stands now only under United Kingdom, Germany and France.
Spanish real estate investment trusts have accelerated their growth in recent years. Currently, 110 of those firms are listed in SMEs stock markets like BME Growth and Euronext Access. In the last decade, both venues attracted companies with a cumulative asset value in excess of €25 billion. However, despite this improvement after the housing bubble burst in 2008, experts say that real estate investment in Spain will decrease this year by 20%-30% amid the uncertain economic outlook and expect price adjustments.
Spain manufacturing grows in February for the first time in 7 months
According to consultancy firm S&P Global, Spain’s manufacturing grew in February for the first time since June last year. It did so boosted by improvements in factory output and employment, which offset further decline in new orders and higher prices.
S&P Global’s Purchasing Managers’ Index (PMI) for Spanish manufacturing rose to 50.7 in February, from 48.4 in January, above the 50.0 mark that separates growth from contraction, amid a mild recovery of demand, which nevertheless remained weak. Spanish economic growth is expected to slow this year as the government forecasts a 2.1% economic growth in 2023, down from 5.5% in 2022.