Investors flee regulatory uncertainty and the Ibex-35 loses 1.9% to 7,945 points
Week to forget in the listed banking and energy sector. The rebound experienced by these companies on Friday failed to compensate for the heavy losses accumulated in the week, accelerated by the announcement by the Prime Minister, Pedro Sánchez, during the Debate on the State of the Nation, to impose two separate taxes in the hope of collecting a total of 7,000 million euros in two years.
The large listed companies of the two sectors –and, therefore, also their shareholders– ended the week with joint losses of 11,000 million euros on the stock market. If the closing of Monday is taken as a reference, the session prior to the announcement of the new taxes, the red numbers are similar, of 10,794 million euros.
The falls have been more pronounced in the banking sector, with a collapse of 6,456 million euros in the joint capitalization of the five entities listed on the Ibex-35 (Banco Santander, CaixaBank, BBVA, Bankinetr and Sabadell) since Tuesday in which the tax was announced. In total, its value on the stock market has gone from 102,000 million to 95,948 million euros.
Since the black day that the banks experienced on Tuesday, with falls that exceeded 10% in some entities, the balance is tremendously negative for investors. Losses exceed 8% at CaixaBank, 7% at Sabadell and Bankinter and 6.2% at Banco Santander. BBVA better resisted the onslaught with a cumulative drop since Tuesday of 4.2%.
The surprise factor has been key in the worst performance of the sector, since the market already discounted the tribute to electricity companies for weeks. In addition, as Rafael Alonso, an analyst at Bankinter, recalls, in the case of banks “the most important details of the plan are still unknown, such as the tax figure to apply, whether it will be on profits or deposits, how it will be calculated. ..». And regulatory uncertainty, in an environment like the current one, is the worst enemy when it comes to attracting investors.
The rating agencies calculate an impact on profits for the sector of around 12%. And Fitch warned these days that “Spanish banks were already facing economic doubts, so the tax, which would apply only to domestic activity, could affect profitability prospects and reduce their competitiveness against European rivals.”
For their part, the energy giants (Iberdrola, Naturgy, Endesa and Repsol) left 4,300 million euros of capitalization, with Iberdrola as the most affected, accounting for almost half of that figure (-2,184 million euros). For its part, Naturgy was the one that suffered the least impact, with a 0.35% drop since Tuesday that has barely subtracted 96 million from its capitalization. Iberdrola gave up 3.4%, while Repsol dropped almost 8% in the last four sessions.
fear of recession
The suffering of the shareholders has been notable this week, in which the Ibex-35 lost 1.9% to 7,945 points in full rebound from the panic of a recession and with new reports from institutions such as the European Commission, BBVA Research or the Independent Authority for Fiscal Responsibility (Airef) shooting up its inflation estimates and cutting growth estimates.
The fear of a cut in Russian gas supply also weighs on investors’ spirits, who fear that countries will begin to take ‘war economy’ measures to deal with the situation. As if the scenario were not already complex, Italy has also shaken the debt markets, with the government crisis that has ended with the resignation of Prime Minister Mario Draghi. “This instability in the third largest economy in the euro zone and in one of the countries in the region with the greatest fiscal imbalances reminded many investors of the past debt crisis that Draghi himself, at the head of the ECB, solved at the time”, indicates Juan José Fernández-Figares, an analyst at Link Securities. “At the moment, the response capacity of the central bank of the region is much more limited, especially since its main objective at the moment is the fight against inflation,” he adds.
Moreover, the market trend in the coming days will be marked by the important meeting of the monetary body on July 21, when the institution will raise interest rates for the first time in eleven years. The question is whether it will do so in 25 or 50 basis points. And, given this situation, experts advise staying out of the market until there is greater visibility, avoiding the mistake of taking advantage of low prices after falls to increase positions.
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