Tide turning for Spain’s economy?

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This topic contains 19 replies, has 6 voices, and was last updated by Profile photo of Anonymous Anonymous 3 years, 10 months ago.

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  • #57223
    Profile photo of DBMarcos99
    DBMarcos99
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    Already we had news in December that various motor companies were investing in Spain (along with the world’s richest men, Buffett and Slim).

    In just a few days there have been numerous signs.

    For example:
    CAF gains light rail contract in Taiwan http://www.railwaygazette.com/news/single-view/view/kaohsiung-picks-caf-to-build-catenary-free-trams.html#.UOySVdQpCgA.twitter
    Korean companies grow in Spain http://www.investinspain.org/icex/cda/controller/interes/0,5464,5296169_6253575_6267630_4645224,00.html
    E-commerce grew by 20% in 2012 and billed 12 billion euros http://www.eleconomista.es/tecnologia-internet/noticias/4516474/01/13/El-comercio-electronico-crece-un-20-en-Espana-y-factura-12000-millones-en-2012.html
    Texas in super-highway deal with Spain http://www.wnd.com/2012/12/its-back-texas-in-super-highway-deal-with-spain/
    San Jose group gains Aby Dhabi contract http://www.eleconomista.es/mercados-cotizaciones/noticias/4518098/01/13/San-Jose-sube-un-23-en-dos-dias-tras-lograr-un-macrocontrato-en-Abu-Dhabi-.html
    IT startup Hooptap wins 500,000 in funding http://loogic.com/500-000-euros-de-inversion-en-hooptap-2/
    Abengoa wins a contract in Chile http://www.renewableenergymagazine.com/article/abengoa-wins-a-water-project-in-chile-20130108
    Abengoa wins contracts in Brazil http://www.foxbusiness.com/news/2012/12/19/abengoa-wins-three-brazil-transmission-licenses-in-auction/

    The above list is not comprehensive, and there are other contracts and projects that have recently been won by Spanish firms.

    Of course even a modest improvement in the economy will not be enough to make a dent in the property market. But some are expecting rich pickings ahead with the proposed economy measure (similar to that already in place in Portugal)
    http://www.express.co.uk/property/view/369012/Is-this-the-end-of-pain-in-Spain-

    Within four weeks of the announcement, property group Grupo Penarroya had flown in Chinese buyers and was showing them around empty homes at La Reserva de Marbella, a luxury estate in the hills, and urging them to buy immediately.

    No luck however. The Chinese are happy to wait for a guarantee of residential status.

    I wouldn’t rule anything out at this stage – there are reports that Castellon airport has been sold… http://www.eleconomista.es/economia/noticias/4517448/01/13/Fabra-recibe-una-propuesta-de-compra-del-aeropuerto-de-Castellon-por-200-millones.html

    Something surely is afoot? The Ibex stock exchange, below 6000 points in July, today rose above 8600 points.

  • #114532
    Profile photo of Anonymous
    Anonymous
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    I am delighted to read. I hope that all those contracts are fulfiiled with a good quality finished product handed over on time & on budget and no shody work, cutting corners, using sub standard materials.

    We all know how glossy their marketing materials are & what the finished product was !!!!

  • #114533
    Profile photo of Anonymous
    Anonymous
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    I wonder whether a country’s rising stock market reflects on its prosperity. It is, after all, a judgment from the rest of the world, usually.

    The Ibex did start from a low base last summer, but it’s rocketing upwards now.

  • #114536
    Profile photo of Anonymous
    Anonymous
    Participant

    I am afraid not. There are many factors & lets face it the Ibex is not a very big market. When I last followed it. It was dominated by Banks, Construction, telephone & utility compnies. I am sure Martin SA is not there any more ?

  • #114537
    Profile photo of DBMarcos99
    DBMarcos99
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    @Rocker wrote:

    I wonder whether a country’s rising stock market reflects on its prosperity. It is, after all, a judgment from the rest of the world, usually.

    The Ibex did start from a low base last summer, but it’s rocketing upwards now.

    The perceived wisdom is that the stock exchange normally predicts what will be the state of the economy in 6 months time. Generally it’s big investors like pension funds who invest in the stock market, hoping to get far better returns than elsewhere. Plus they try and guess the tipping point to pull out or to invest again.
    Having said all that, dealers make a lot of money both out of falls and rises. I wonder if there isn’t a large amount of following the crowd, with the current rise, similar to the fall last summer. They always say you should follow the trend, but I would always be fearful of missing the change in sentiment.

  • #114538
    Profile photo of Anonymous
    Anonymous
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    @DBMarcos: Agree with your posting. In the present climate the cash rich pension funds may be riding the wave and can get out any time.

  • #114549
    Profile photo of Anonymous
    Anonymous
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    @Marcos.

    I missed the last part of your post concerning the possible sale of Castellon airport, with the projection of a 1,200 job creation scheme. The 200 million price tag seems low, but who cares if 1,200 jobs are created.

    It’s just what Valencia needs, it’s biggest white elephant proving the experts from elsewhere wrong.

    I would still be surprised if it works, Castellon doesn’t have much going for it apart from growing oranges, tourism and fishing, with the small airport of Valencia and the massive one at Alicante already serving the regions needs.

    It seems strange that they’re keeping the buyers secret, but it would make an ideal base for the US military with only the Mediterranean separating them from their next most likely target. (If they’re allowed to fly over their friend’s airspace in the Middle East.)

    Their giant base at Frankfurt has proved to be too far from the shores of the Indian ocean and the UK bases are even further away.

  • #114550
    Profile photo of Chopera
    Chopera
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    Stock markets often fall before downturns and rise during them. The rise is because companies generally become leaner and more efficient during recessions, and after a while it becomes easier to pick which companies will eventually come out well, and which ones won’t. However the situation has been distorted recently by government/central bank interference.

  • #114554
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    @Rocker wrote:

    @Marcos.

    I missed the last part of your post concerning the possible sale of Castellon airport, with the projection of a 1,200 job creation scheme. The 200 million price tag seems low, but who cares if 1,200 jobs are created.

    It’s just what Valencia needs, it’s biggest white elephant proving the experts from elsewhere wrong.

    I would still be surprised if it works, Castellon doesn’t have much going for it apart from growing oranges, tourism and fishing, with the small airport of Valencia and the massive one at Alicante already serving the regions needs.
    .

    I thought the price tag seemed exceedingly generous, given that there is no guarantee of attracting enough flights to make the airport profitable. As you point out, people can already fly to Valencia or Alicante. In fact the price tag seems far too high to be genuine – just my opinion, and of course I could be missing something.

  • #114555
    Profile photo of Anonymous
    Anonymous
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    Of course, it can bought at the price, with fat commissions, and kick backs to all & sundry along the chain. Six months or so of non profit operations. It would be back on the market and then perhaps the region, central government, EU will pick the tab.

  • #114556
    Profile photo of Anonymous
    Anonymous
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    You’re being too cynical. Things like that don’t happen in Spain. Down in Marbella, they chopped the tops of mountains to build houses for expats, in Orihuela Costa they concreted miles of shrubland to build homes for Brits, but the big one was Benidorm – they built tower blocks in a little fishing village that had some nice beaches.

    Did any of the destruction of the Mediterranean coast work? I think it did, it propelled a sleepy country into the future. When I say sleepy, it was a sleeping giant, five times bigger than the UK.

    And they’ve still got room for a few million more immigrants, having got rid of the shady Brits from Marbella they are wide open for new immigrants, wherever they come from. Even Martians.

  • #114557
    Profile photo of peterhun
    peterhun
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    @Rocker wrote:

    When I say sleepy, it was a sleeping giant, five times bigger than the UK.

    I know you refuse to use the Internet to find out facts, but can you look at a map and see that Spain is NOT FIVE TIMES BIGGER THEN THE UK.

    Spain is TWICE as big as the UK, and it cannot be called a giant. Besides anything else, its only has the same amount of water as the UK so its growth prospects are limited.

  • #114558
    Profile photo of Anonymous
    Anonymous
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    @peterhun wrote:

    @Rocker wrote:
    When I say sleepy, it was a sleeping giant, five times bigger than the UK.

    I know you refuse to use the Internet to find out facts, but can you look at a map and see that Spain is NOT FIVE TIMES BIGGER THEN THE UK.

    Spain is TWICE as big as the UK, and it cannot be called a giant. Besides anything else, its only has the same amount of water as the UK so its growth prospects are limited.

    OK Peter, I stand corrected, twice as big. With a smaller population, it has plenty room to expand, to double its population to get somewhere near to the UK standards, and the rest of the crowded EU.

    That means it has got room for another 60 million people. That’s the point I was clumsily trying to make.

  • #114559
    Profile photo of DBMarcos99
    DBMarcos99
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    @peterhun wrote:

    @Rocker wrote:
    When I say sleepy, it was a sleeping giant, five times bigger than the UK.

    I know you refuse to use the Internet to find out facts, but can you look at a map and see that Spain is NOT FIVE TIMES BIGGER THEN THE UK.

    Spain is TWICE as big as the UK, and it cannot be called a giant. Besides anything else, its only has the same amount of water as the UK so its growth prospects are limited.

    Your first point may be valid, but hard to understand your second..Spain, like the UK, is surrounded by water.
    Spanish companies are among the global leaders in desalination technology
    http://elpais.com/elpais/2013/01/07/inenglish/1357573268_753450.html

    “It’s not simply that Spain is a world leader in desalination; it’s that our companies are the top players, and are building the biggest desalination plants,” says Antonio Dorado, chairman of Sadyt, the water division of Sacyr-Vallehermoso, which runs plants in Chile, Israel and Australia.

  • #114560
    Profile photo of Chopera
    Chopera
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    @Rocker wrote:

    You’re being too cynical. Things like that don’t happen in Spain. Down in Marbella, they chopped the tops of mountains to build houses for expats, in Orihuela Costa they concreted miles of shrubland to build homes for Brits, but the big one was Benidorm – they built tower blocks in a little fishing village that had some nice beaches.

    Did any of the destruction of the Mediterranean coast work? I think it did, it propelled a sleepy country into the future. When I say sleepy, it was a sleeping giant, five times bigger than the UK.

    And they’ve still got room for a few million more immigrants, having got rid of the shady Brits from Marbella they are wide open for new immigrants, wherever they come from. Even Martians.

    you are being sarchastic, right?

  • #114577
    Profile photo of peterhun
    peterhun
    Participant

    @dbmarcos99 wrote:

    Your first point may be valid, but hard to understand your second..Spain, like the UK, is surrounded by water.
    Spanish companies are among the global leaders in desalination technology

    I’m talking about food production, it takes a lot of water to produce. 1500 liters of water for 1kg of wheat, 4 tonnes for 1kg chicken for instance.
    Desalination blows the economics of food production even before you have to pump it 100km. Which is why most of Spain looks like a desert

  • #114597
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    We’ve seen other analysts tip Spain – now Barclays want in on the act. According to this report they say investing in the Spanish Bolsa is the opportunity of the century. Their argument is that not only is the Ibex up more than 30% from its low point in 2012, it is also 35% up from 2010.
    Note – this is not my opinion. It’s always hard to call the turning of a market, although there may be further rises to come. But if you buy towards the top, you run the danger of holding stock that has a long way to fall. On the other hand it would have been good to have made 30% on an investement in 2012. Can 2013 continue in the same vein? Time will tell…beware of Black swans..

    http://www.expansion.com/2012/12/13/mercados/1355402367.html

  • #114601
    Profile photo of Anonymous
    Anonymous
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    Most bank heavy nations are in deep problems if Spain doesn’t start recovering soon since their banks are in one way or the other exposed to the real estate crisis in Spain. They will ofcourse hype it up if it makes their investments better.

    Just look at the UK external dept per capita and you will see what I mean. As long as their investment is a float this debt is not a problem but if not they are in trouble.

  • #114603
    Profile photo of peterhun
    peterhun
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    @Ardun wrote:

    Just look at the UK external dept per capita and you will see what I mean. As long as their investment is a float this debt is not a problem but if not they are in trouble.

    Countries like the US and UK have large external debt but also very large external assets to balance it. You can’t ignore one or the other.

  • #114604
    Profile photo of Anonymous
    Anonymous
    Participant

    @peterhun wrote:

    @Ardun wrote:

    Just look at the UK external dept per capita and you will see what I mean. As long as their investment is a float this debt is not a problem but if not they are in trouble.

    Countries like the US and UK have large external debt but also very large external assets to balance it. You can’t ignore one or the other.

    Yes that’s why the UK and it’s banks hype up the possibility for the spanish sector to recover since they are in so deeply invested in their economy. If Spain continues or worse on this route it will mean a ten fold multiplying effect on Ireland and the UK. Their assets will be shown not to be worth close to what they are now on paper. These bad investments will be handed over to the tax payer via the normal national debt eventually when it goes sour.

    The effect on the US is harder to predict.

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