One of the data that reflects the evolution of the main European equity indices is that the Ibex 35 shows a worse trend compared to neighboring countries. It is a square where returns have been more nuanced. This is a trend that has been evident since the first months of 2019. To the point that some of the investors have directed their savings to other European indices with the aim of improving your income statement in each of the exercises.
This trend in Spanish equities is caused by many reasons and of diverse nature, as will be shown in this article. But in any case, it has penalized the positions of small and medium investors who have opted for the securities that are trading on the continuous market of our country. With mean negative difference that has reached 3% or 4% annually compared to our main competitors in the financial markets. In an environment that can be considered as moderately positive under the current current economic circumstances.
At the moment, the selective index of the variable income of Spain, the Ibex 35, moves in a range that of the 9.200 points to the 9.700 points. Under a trend that must be classified as lateral bullish and that offers very narrow ranges to operate with stock values these days. On the other hand, it cannot be forgotten that in Europe the Ibex 35 stands out, which is the index that rises the least and banks are the sector with the worst performance in the Spanish selective. The Dax, on the other hand, is the one that shows the most strength, as is the Euro Stoxx 50, which actually brings together the most relevant equities in the old continent.
Ibex 35: dependence on banks
One of the reasons to explain the worse performance of the selective in our country compared to the rest is the excessive dependence on credit institutions. At a time when these financial groups are not going through the best of times from the stock market point of view. With depreciation in the last twelve months of more than 10% in its valuation on the stock market. Thus, it is weighing down the stock market in our country since it represents just over 15% of the capitalization in this financial market. Something that certainly does not happen with the equity markets in our environment and that causes the behavior of the Ibex 35 to be worse.
In this general context, this excessive dependence may harm the intentions of small and medium investors in their decision to take positions on the Spanish stock market. Not surprisingly, they have the option of targeting the European markets that have maintained a more positive trend in the last year and a half. Although it requires higher commissions than in national operations, around a 5% increase over the total of purchase and sale operations. While on the other hand, they present a very diversified offer in regards to the sectors that are represented in these stock indices.
Political problems
Another reason to explain the worse performance of the Ibex 35 is due to the doubts that have been generated by the political instability and that has led to many of the large investors having directed their capital to other financial markets. And that in any case has led to a divergence in the evolution of these indices being revealed. Damaging financial assets that are listed on the national continuous market, as has been seen in recent months. Although this is a scenario that may change from time to time and it may be this current year. At least to balance the exercises of these equity markets.
While on the other hand, we must also take into account from now on the fact that the stock market of our country is more vulnerable to the decline of the economy. In other words, it grows less in the most recessive periods and this is a fact that can be verified in the series of historical prices within the selective index of the stock market in Spain. Where you have to be more selective to make your savings profitable in an efficient way and aimed at all terms of permanence: short, medium and long. Where the offer is not so extensive in terms of the values compared to those offered by the European markets.
Due to temporary causes
Nor should it be denied that temporary causes explain the worst performance of equities in Spain. Because our country shows the economic data with greater weakness than in the other countries and all this has a very sensitive impact on the equity markets. Especially in more recessive periods as it is not a very solid economy within the European Union. Within this general context, it should also be noted that the Spanish stock market has been heavily penalized by these factors and to the point of lagging behind the stock market indices of the countries in our closest environment.
In this sense, it should be noted that while the Ibex 35 last year appreciated very close to 10%, the rest exceeded these levels. As for example, CAC 40, DAX or Footsie which stood at 15%. That is, with a difference of approximately 5% in terms of the benefits received by small and medium investors for their operations. From this point of view, the stock market in our country, at least for the moment, is less profitable than the rest and this is a factor that may influence our turning to other international markets to make our capital profitable from now on.
A downward turn in the last week
On the other hand, in recent days we have witnessed a new sign of weakness on the part of the selective index of our country. By showing a disturbing turn to the downside after having filled in the bullish gap that it had from previous weeks. Something that is not precisely considered a sign of strength by analysts in equity markets. While on the contrary, the German DAX has only slightly pierced its bullish guideline. For their part, the indices in the United States are the ones that continue to show their greatest robustness and, more importantly, at all-time highs.
From this stock market perspective, the Spanish stock market is the one that is generating the least satisfaction among small and medium investors. Although it is to be expected that in the medium term this situation can change and catch up with some international places. Not surprisingly, it has a greater growth potential compared to some of these. Now what remains to be verified is the moment when this equilibrium arrives in the configuration of the prices of the securities that make up the selective. Where the political determining factor can play a very determining role in achieving these objectives in the stock markets. Despite the fact that there are many securities in the Ibex 35 that are trading at discounts that seem very interesting to take positions these days. In particular, in some companies in the banking and cyclical sector that are at levels of clear oversold after the cuts of the last months and that can be a purchase option for the following weeks.
Stock market operations grow 5%
The Spanish stock market traded in equities last month a total of 40.646 million euros, in line with the previous month and 4,8% more than in the same period of 2018. Recruitment for the year as a whole amounted to 469.626 million euros, 18,1% less than the previous year. The number of trades accumulated up to this period decreased by 15,9%, to 37,2 million, after registering 2,8 million transactions in December, 10,0% below the same month last year and 11,4 % less than in the previous month.
On the other hand, BME achieved a market share in the contracting of Spanish securities of 72,2% for the year as a whole. The average range for the year was 4,91 basis points in the first price level (12,9% better than the next trading venue) and 6,88 basis points with a depth of 25.000 euros in the order book (a 34,3% better), according to the independent LiquidMetrix report. While on the other hand, the market for financial derivatives closed this year with a cumulative increase in trading of 3,3%. In this evolution, stock futures stood out, with an increase of 42,9%; at the same time as the futures on stock dividends, with an increase of 60,9%. Meanwhile, the indices in the United States are those that continue to show their greatest robustness and, more importantly, at record highs. At all terms of permanence: short, medium and long.