Spanish Stocks

Economy and Politics

The Spanish economy represents the twelfth largest economy in the world. The main economic sectors are tourism, communication and information technology, metal processing industry, mechanical engineering, agriculture, and petrochemicals. The main export and import partners are France and Germany.

Since the constitution from 1978, Spain has been a parliamentary monarchy. It declares Spain as a social and democratic rule of law that is committed to freedom, justice, equality, and political pluralism. The Spanish people, from whom all state power emanates, are the bearer of national sovereignty. The Head of State serves as a symbol of unity and continuity. Its tasks include the appointment or removal of the Prime Minister and members of the government.

Since 2007, the Spanish economy has faced significant difficulties. After 15 years of economic growth, a recession began at that time and the unemployment rate is now one of the highest in Europe (in 2007 it was only 8%, in 2013 approximately 25%). The real estate and banking sectors have been particularly affected. The previously moderate level of government debt has increased significantly since 2008.

The Spaniards are also known for their banks and tourism. The major Spanish companies were banks, with Banco Santander, the second largest financial institution in Europe, and Banco Bilbao Vizcaya Argentaria, focusing on Spain, Portugal, and Central and South America.

Large individual companies are the telecommunications company Telefónica, the utilities company Iberdrola and Gas Natural, the insurance company Mapfre, the infrastructure company Abertis, and the textile company Inditex.

Spain has been severely affected by the pandemic. In 2021, Spain wanted to overcome the coronavirus. However, the economy is on the verge of collapse and the coffers are empty.

In the past, Spain was a strongly agricultural state, but in recent decades, only the industry has gained importance. Therefore, the main sectors of the Spanish industry are petrochemistry, agriculture, metal processing industry, mechanical engineering, communication technology, and tourism. Another typical sector is the construction industry, led by Grupo ACS and Ferrovial.

The largest companies

Aena, the largest airport operator in Spain. Aena is the owner and operator of a total of 46 Spanish airports, making it the clear number one in the country. With more than 264 million guests per year, the company is one of the most well-known airport operators worldwide. This creates one of the deepest moats: anyone who wants to fly to Palma de Mallorca, Ibiza, Barcelona, or the Canary Islands as a tourist "must" land at one of Aena's airports. Since new airports are no longer approved, Aena has a natural monopoly. This monopoly allows for exceptionally high cash flow, amounting to an incredible 1.5 billion EUR per year, making Aena a true cash machine. Shareholders earn significant dividends from this.

Another large and well-known company among investors is Iberdrola S.A. The company is a Spanish electricity generation and distribution company based in Bilbao. In 2008, the company was the seventh-largest European power producer. Its core businesses include the generation, transmission, distribution, and marketing of electricity and natural gas. With its services, the Spanish company reaches approximately 16 million customers, nine million of whom are in Spain. Additionally, the company is one of the largest producers of hydro, thermal, and nuclear energy in Spain. The company covers the electricity supply in almost all of Spain.

As mentioned above, Banco Santander, which also has several locations in Germany, is a Spanish universal bank. The bank operates in the retail and corporate banking sector. For retail customers and small companies, the company offers daily payment transactions, credit cards, consumer loans, loans, and investments. For larger companies, the bank provides consulting, cash management, risk management, and asset management. The company's network consists of approximately 12,000 branches worldwide. The bank focuses its activities on 10 core markets: Spain, Germany, Poland, Portugal, the United Kingdom, Brazil, Mexico, Chile, Argentina, and the United States. However, it is also active in other countries. Together with Elavon, a provider of international payment processing, Banco Santander operates a joint venture for retailer services.

The largest and most important trading venues

In addition, the Palacio de la Bolsa in Madrid is home to Spain's most important stock exchange. The stock exchange is the largest of a total of four stock exchanges in Spain, with additional exchanges located in Barcelona, Bilbao, and Valencia. Another trading venue is the Bats Europe.

Index Performance

which represents the 35 largest and most liquid Spanish companies on the Madrid stock exchange. It provides insight into the development of the Spanish stock market and is also considered a benchmark for the Spanish financial sector. The IBEX 35 is weighted based on the market capitalization of the listed companies and is regularly reviewed to ensure it provides an accurate representation of the Spanish market. the index includes the 35 most important Spanish companies. The index was introduced on January 14, 1992.

The index base is at 3,000 points as of December 31, 1989. Unlike the DAX, it is a price index without the influence of dividends. Currently, the IBEX 35 index is at over 8,700 points. The companies with the highest weight in the index are Iberdrola, Inditex, Banco Santander, and Cellnex.

Trading hours in Spain

Stock trading takes place during trading hours from 09:00 am to 5:35 pm local time.