10 years Ago Spain was engulfed in a major economic crisis. The investment committees of the major international funds have excluded the Spanish companies of their radar. Then what was at stake was the survival of the euro and the european project was threatened by dissolution by your side more weak: the partners in the south. In that context we held the first edition of Spain Investors Day (SID). The idea was (and is) to bring together in Madrid the leaders of listed companies with the representatives of the large institutional investors —investment funds and pensions, insurers, sovereign wealth funds, groups, venture capital and hedge funds—. A road show focused and multi-sectoral with the icing of the presence of the major economic authorities of the country. The forum will celebrate its tenth edition the next 14 and 15 January in a setting less dramatic than in the beginning, even though it is not exempt of risks. “This is probably the year that expectation has raised. There will be great participation of the investors and the profile of the representatives of the companies has also improved,” explains Luis Sancho, head of corporate and investment banking of BNP Paribas, the bank responsible to coordinate the presence of international investors in the SID.
the organizers of The event estimate that there will be presence of 40 publicly-traded companies and over 150 funds, in addition to 1,200 guests from the business and financial world. “This high interest I attribute that to a triple reason. On the one hand, Spain is one of the countries fastest growing among the large economies of the world, something that will remain in 2020. In addition, although the local Stock market will close this year with climbs, your behavior has not been as good as the other indexes and we hope that in the next 12 months to recover this lost ground. On the other hand, our country boasts of many multinational companies that are leaders in their segments,” says Sancho.
it is Still an open question whether the new appointment with the SID will start or not with a government agreement in Spain. The money is not a friend of the uncertainties, but the banker of BNP Paribas downplays the impact that political uncertainty can have on the mood of foreign investors. “The truth is that this type of situation delays investment decisions, but it seems to be that the solution can be reached in a matter of weeks.”
That solution that he speaks of Sancho would happen, if there are last minute changes, by the presence of We in the new Executive, a party that has always aroused distrust in the financial world, with Pablo Iglesias as vice president. “Spain is one of the biggest success stories of the last 40 years in terms of economic and social progress and all governments have maintained a commitment to fundamental values such as the europeanism, the control of the deficit and structural reforms. In their interventions, Pedro Sanchez remains on your agenda, these objectives, you should not have surprises,” recalls Sancho.
BNP Paribas, bank coordinator of the event, are optimistic about the Spanish economy
In the decisions of institutional investors each time you have more weight to companies where they have a solid corporate governance. In Spain, however, the cascade of alleged irregularities have forced the National Commission of the Market of Values (CNMV) make a public warning to remind listed companies of the need to strengthen their internal controls. This aspect, which has soliviantado the supervisor of stock, does not in the opinion of this banker a loss of credibility of local companies. “I don’t think that is something exclusive to the Spanish companies. As in any other site, are subject to human weaknesses. The standards of corporate governance in our country are very high. Have checks and balances, and internal controls resulting ultimately in a better performance of the business and that is an important reason to invest in a company”.
The question that arises with this argument is if, as he says Sancho the levels of good governance are so high, why in recent months we have seen a trail of alleged cases of irregularities among the large listed companies with patterns of espionage included. “Some of the examples to which you refer occurred many years ago, when standards were not those of now. In this field we have seen a big improvement,” ditch.
From BNP Paribas trust that in that 2020 is a better year for the economy and consequently for the markets. “We are optimistic. It is true that there has been a cooling, but we are beginning to see signs that lead us to think that the chances of surprises are more to the upside than to the downside. The first quarter of 2020 possibly continue with global growth weak, but from there maybe you will see an acceleration as the uncertainties such as the trade war and the Brexit, is to go punting”. Sancho is especially hopeful for Europe. “We are seeing some indicators developed that they say could be a better year than expected. And that would be a very, very big impact for Spain, as 70% of its exports directed to the European Union”.
corporate Movements
In recent months, we have accelerated the operations of concentration in many sectors, a trend that, according to the head of BNP Paribas, will continue. “It has created an inertia that facilitates the extension of this dynamic. On the one hand, there is a tendency among companies to specialization. In this sense, it highlights the reorganisation of Telefónica, which will lead to corporate operations. In other sectors such as renewables, there is a proliferation of actors and this may lead to mergers. In addition, there are segments that need to gain critical mass, an example of which are manufacturers of components for cars; if the car manufacturers are joining, they should also be considering”.
Where there has been a sudden stop has been in the chapter of the outputs on the Stock exchange in Spain. “Many operations have been delayed by political instability, but as soon as you resolve the formation of Government should be turned back on the plans of placement,” concludes Sancho.
