The recent elections held in Catalonia are going to generate repercussions in the equity markets. As a consequence of the repetition of the absolute majority by the forces defending independence in this geographical area. This was collected by the stock markets of the old continent with a significant divergence from the spanish bag and those of the rest. In this way, last Friday while the national selective index, the Ibex 35, 1,20% was left, the Eurostoxx only did it by 0,49%. With very negative effects on Spanish equities that penalize the result of these elections.
Of course, the effects for the financial markets here can be much more negative from now on. Something that you must take into account to develop any kind of strategies. Both to make purchases and if you want to formalize some sales in your investment portfolio at this time. Not in vain, Catalonia is going to weigh a lot in the evolution of the stock market indices in Spain. With some sectors more affected than others and that can give you the odd signal about where you have to direct your movements. At least during the first weeks of the year that is about to be erected.
On the other hand, you cannot forget that the Spanish stock market is showing as a consequence of this political event a higher volatility than the other international places. With a greater difference between its maximum and minimum prices. As a positive element, it offers you more opportunities so that you can enter and exit the financial markets more easily. That is, trading to make the savings profitable in a faster way and without having to waste a lot of time to finalize the operations. It is one of the great advantages provided by this scenario that has led to the elections that have taken place in Spain.
Catalonia: better other indices
The best way to get around this problem is to go to other international places. In this sense, equity indices in European countries can be a solution to your investment needs from now on. But it can generate a difference of between half and one percentage point with respect to national stock indices. You can at least employ this very special strategy during the first part of the new year that is about to begin. Because obviously they will not be so affected by the process of political life in Catalonia. Or at least under a less powerful incidence that will give the opportunity for your operations to be optimized under parameters much more satisfactory for your interests as a small and medium investor.
From the general scenario, from now on you can consider entering a European index to give way to your aspirations to improve the balance of your checking account. In sectors with the banking which lags further behind with respect to the other business segments. This is an investment strategy that you can develop during the first days of the new year. Until the Ibex 35 normalizes its prices. Or at least until you can see how the composition of the new parliament is going to affect Catalonia. Because the first reactions have been really very negative. To the point that it can condition the Spanish stock market until the end of the year.
Flight of companies from Catalonia
They are already more than 3.000 companies who have decided to leave Catalonia to manage their business lines. Among those that stand out are some of the most relevant of the national selective index. Such as Caixabank, Gas Natural, Banco Sabadell or Abertis. This makes them much more vulnerable than others for the conformation of their prices. With greater volatility in them. In this sense, you will have no choice but to be much more prudent when opening positions from now on. Not surprisingly, you can give yourself the odd surprise in the coming months. And therefore, the most reasonable thing is that you do not risk your money. Among other reasons because it will not be worth it since you currently have other alternatives to invest.
Everything seems to indicate that the period of instability in Catalonia it can last a long time. A new scenario is not even ruled out in which new elections have to be held to clarify the new political map of this important part of Spain. To the point that it could have a negative impact on Spanish equities. With a worse performance than in the other international places. Of course, they will prevent you from achieving the objectives you have set for this new cheesy that is going to start in a few days.
The largest IPO of the year closes
One of the effects it is having on the markets is that some business operations are being delayed. One of the most important is the one related to the IPO by Metrovacesa. Because in effect, the uncertainty that opens over Catalonia after the elections this Thursday conditions the largest IPO of 2018, which faces price reductions and even the window of opportunity closes. Not in vain, it was a calendar that was marked months ago, but always conditioned to know the results of the recent 21-D. And in this sense the answer has not been satisfactory for their interests.
As a consequence of this news, if you wanted to start movements in this company, you will have no choice but to wait to satisfy this demand in investment. Because you cannot forget that the weight that Catalonia represents on the total Metrovacesa land portfolio is 18%, that is to say, very less than actual weight that the economy of this community has over the total of Spain, and half of these lands are for offices and commercial. Nor is it ruled out that it may affect the processes of other companies that are in a similar situation as the real estate company.
All banking in red
Of course, another of the effects of the electoral day of 21 D is that the value of the banks has depreciated very notably. Virtually without exception and it can be a movement in national equities that can last perhaps too long. To the point that you will already have opportunities to buy their shares under more competitive prices than the current ones. Another of the data that you should analyze is that these falls occur despite the fact that both entities have moved their registered offices outside of Catalonia after the illegal referendum on October 1, Sabadell to Alicante and CaixaBank to Valencia, like some of the examples of these changes in its headquarters.
However, there will always be opportunities for you to also make your financial contributions profitable from now on. Although in most cases they will come from secondary market proposals. Through very small capitalization companies that can develop significant upward movements favored by this political fact in Catalonia. Or even with securities that are listed in the most representative indices of the equities of the old continent. You can take advantage of this incidence through small and specific operations of very low value. Especially since these are operations with higher risks since they are not very reliable movements and can lead you to really dangerous situations at some point in time. It is convenient that you do not forget it so as not to lead you to a very undesirable situation for your interests as a small and medium investor.
Rise in the risk premium
Another point where this uncertainty has also been reflected in the financial markets is in the risk premium. Because the tension has also been felt in the profitability of the 10-year bond, which rises to 1,50%, with the risk premium rising to 110 basis points. Some analysts of the financial markets do not rule out that in the coming sessions it may even climb to levels of 125 or 130 points. Something that would be very negative, not only for the economy in Catalonia, but for all of Spain. And that could even have a negative impact on the growth of the Spanish economy. With the reduction of a few tenths on the expectations created until now.
On the other hand, and as might be expected after these elections, the reactions have not been long in coming, far from it. In this sense, Moody's it has already warned that the persistence of uncertainties could be negative for economic growth. Tourism and investment could be two of the most burdened sectors. Therefore, they will be some of the stock market segments from which you should refrain from taking positions to avoid problems.
At least in the short term. Because there is more you can lose than gain. It is something you should have as of now and for 2018. Other analyzes are even more negative and predict growth in the Spanish economy below 2%. Because more doubts are contemplated than initially foreseen.
Please, do not assume us after the independentists have won the elections. The world is not going to fall. These independentistas have been ruling Catalonia for more than 30 years. The companies that have left have very good fundamentals, a lot of consistency and are very well positioned. At first they can go down a little included due to the attacks of the bears, but it is a lie, these companies are very solvent and what you want is to lower prices to buy cheaper.
So quiet.