At Creand Wealth Management they consider that Spanish equities have all the wind in their favor to maintain the upward trend next year. In its forecasts for 2025, in fact, it is one of its favorite bets, despite the fact that it continues to be forgotten by the large international investment funds. A trend that could be reversed as soon as the good figures of the Spanish economy are taken into consideration, as the weekly newspaper has just highlighted. The Economistwhich would give impetus to the good streak of the Spanish listed companies.
“It is curious that in recent years it is the stock market that has done the best and yet continues with better multiples than its European comparables“said Luis Buceta, investment director of the Andorran private banking firm in Spain, who highlighted the capacity that it will have to maintain this inertia in the coming years thanks to the composition of the GDP, dominated by services, in a context of increasing wages, where consumption will benefit.
“There is a breeding ground for the Spanish stock market to continue doing well. There are few companies, compared to other indices, but they are very good,” said Buceta, during the presentation of the firm’s perspectives, and mentioned Inditex, despite the fall in the stock market that this Wednesday after the presentation of quarterly results, Iberdrola, Endesa or the firms in the real estate sector, “with a structural environment different from the rest of the world, are trading at discounts on NAV that have penalized them”, like some of investment ideas.
Among his bets on the Iberian market, he also mentioned industrial or energy sector firms that “have been forgotten”, such as Arcelor, Acerinox or Tubacex; Amadeus, which “has not yet recovered pre-Covid levels”, Logista or Elecnor. “When large international funds set their sights on Spain, we can see inflows of money in the coming years,” said Buceta.
This interest in the Spanish stock market is in line with reducing the underweight that the firm maintained in equities, to take advantage of a possible rally of the stock markets before the end of the year and waiting for the concrete measures adopted by Donald Trump That, although some have a clear inflationary focus, such as the imposition of tariffs, Creand considers that they do not have to have the impact that analysts predict.
“Trump wants to lay the foundations for bilateral negotiations for the coming years, because Tariffs are nothing more than the tools you have to put pressure on China and Europewhich are equally protectionist. It is not a purely commercial issue,” said Buceta, who highlighted that the tax reduction and deregulation expected in the US has increased the divergence between the US and Europe.
“The fact that the American stock market has risen so strongly does not mean that it will fall now, and if the Fed maintains the rate cut, in twelve months the expected return is always positive, historically,” warned Buceta, who nevertheless showed the firm’s commitment to the European stock marketwhere “if some things change, it could do better than the American and Japanese stock markets, although in the long term, the American stock market continues to be more efficient, because it is a more productive economy,” he stressed.
By sector, Miguel Ángel Rico, investment director of Creand AM, pointed to semiconductors, such as firms such as ASML, VAT Group or KLA Corporation, or tourism, where they are betting on values such as Compass, IHG Hotels or Amadeus. In luxury companies, they consider that you have to be very selective, although they have taken advantage of the falls in L’Oreal to buy shares.
However, at Creand WM they remember that business profits will be what will set the investors’ agenda next year. “We must keep in mind that the American stock market has risen a lot, but the profits of the Magnificent Seven, although it has grown, is lower than previous quarters. And if we remove the large technological values, the profits of North American companies have risen very little. And the European stock market is at a minimum compared to the American one since European indices have existed, with weaker business profits, due to lower productivity and higher regulation,” said Buceta, who expressed confidence in a reversal of this. scenario because Real salaries are growing and “that is a boost for the consumer. And if Germany and China coincide with stimulus measures, it can be very positive” for the stock markets, he stressed.
Fixed Income
Regarding fixed income, the investment director of Creand WM expressed that there will be a reasonable scenario, with coupons above inflation. “An environment where nothing happens in the macro is quite friendly for credit. It should not be a bad year because there will not be a liquidity problemas in 2022. The levels accumulated in monetary funds and in direct accounts in Treasury bills in the United States provide a liquidity cushion at a time when there will be many public debt issues in the coming years and, even if rates fall of interest and the saver wants to earn more returns, they will have said cushion,” Buceta explained.
The firm prefers “reasonably” short durationsbelow three years, in credit quality assets, because in high yield an expected return of 5.5% no longer offers an attractive premium. And they continue betting on financial subordinated debtwhere returns of 8% can be obtained, and hybrid assets, such as loans or CLOs.
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