Despite the global pandemic, the XII edition of the International Economic Forum Spain Investors Day (SID) was held this January (both online and on-site in Madrid), with the participation of more than 150 international investors and the presence of at least 43 listed companies, which has meant a great success given the situation.
The SID has established itself in Spain as one of the best showcases for companies to present their past year results, their budgets, their investment initiatives and their strategic plans for the coming years; and at the same time for the Spanish government to present its economic plans to investors, the benefits of investing in Spain and explain some issues of vital importance to attract investment, such as the priority sectors to be developed in its economic policy or the tax model for foreign investment.
According to Benito Berceruelo, president of the SID, "the Spanish stock market has added a large number of capital increases, has been at the forefront in the distribution of dividends and has managed to list seventeen new companies on the Stock Exchange in the middle of the pandemic". This intense activity is causing new sectors such as renewables or biotechnology to gain ground over more traditional sectors such as banking, and opens the door to the arrival of new international investors: "large funds demand legal certainty, predictable economies and governments that do not generate expectations that cannot be fulfilled". In this regard Reyes Maroto, the Minister of Industry, Trade and Tourism, who chaired the inaugural session of the SID, pointed out that "Spain is offering investors confidence, security and certainty".
The aim of the forum was to promote Spain's attractiveness as an investment destination for the future. The Minister of Foreign Affairs, European Union and Cooperation, José Manuel Albares, sent a message of confidence to international investors, inviting them to take part in "a promising future for Spain", emphasising the message of the strength of the Spanish economy and the positioning of Spain as a focus for international investment. In this regard, the Minister referred to the fact that Spain is "the world's fourteenth largest exporter of commercial services, the eighteenth largest exporter of goods; meaning the exports of goods and services the 34% in GDP, with almost 200,000 exporting companies, 55,000 of which are regular exporters".
The president of BNP Paribas in Spain, Cecilia Boned, pointed out tha Spain's "ambitious green transition agenda has created a favourable context for investment in sustainable energy, an area in which Spain shows clear leadership. We are the second largest European market for M&A deals in renewables in 2021, we have the largest solar infrastructure in Europe and one of the largest wind generation capacities".
Regarding the performance differential of the Spanish stock Exchange market compared to other more powerful ones in the last year, she believes that this due to the fact that "we have very little representation of those sectors that in recent years have had strong growth, such as technology or luxury, but for this very reason this is a window of opportunity for these sectors to establish themselves and gain a foothold in Spain". Those companies that can protect their margins from inflation will be favoured. Sectors such as luxury, which are less exposed to possible price increases, are an example in this sense.
One of the issues that most worries investors is inflation and the rate hike for 2022 that the Federal Reserve has already announced. In this regard, Cecilia Bonet is confident and believes that "in Europe, on the other hand, they will be more cautious and will withdraw stimuli more gradually. I don't think we will see rate hikes on the continent until 2023”. That said, the big protection for equities is that the real interest rates, after discounting inflation, will remain negative, which is a favourable environment for equities.
The distribution of the next generation European funds has generated maximum expectation. In this respect, the Governor of the Bank of Spain stated that "activity will evolve positively and the Bank of Spain's projections anticipate that the recovery will continue in the next three years, especially with the imposition of the EU's Next Generation funds. The use of European funds is a major determinant for economic recovery", which will be one of the great levers for the Spanish economy in the coming years. In other words, it will mark the growth of GDP, which will depend to a large extent on an efficient distribution and a correct choice in the spending of funds. These are the tasks ahead and the great challenge for the Spanish state as a whole.
Abogada Arantxa López-Cobo Van Nyjdam
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