MADRID, 8 Jul. (EUROPA PRESS) –
Société Générale has reduced the growth of Spanish GDP to 3.5% this year and to 3% in 2023, and expects that by the end of this year inflation will moderate by half compared to its current levels, to stand at 5% .
This was highlighted by the entity this Friday in a meeting with the media attended by the director of capital markets, Fernando García; the head of rating advice for sovereign states, Jaime Sanz, and the head of capital markets for financial institutions, Carlos Cortezo.
The firm expects the reference rates of the European Central Bank (ECB) to end the year around 1% and to rise to 1.5% by the end of 2023. The US Federal Reserve (Fed) is one step ahead and will finish 2022 around 2.5% and 2023, at 3.25%.
“No one in the market expected rates to remain negative or close to zero forever,” Sanz said.
Spain will grow around 3.5% this year and close to 3% next year, above what is expected for the Eurozone, which will have growth of 3% and 2%, respectively.
García highlighted that the first half of the year has been marked by inflationary pressures and the Russian invasion of Ukraine, “factors that have returned investors’ distrust of the capital markets.”
This lack of confidence, together with the actions carried out by the central banks, have caused a slowdown in the primary market.
“Investors are now more selective when choosing which new issue to participate in, seeking more liquid operations, and with a preference for green, sustainable or social components”, the entity highlighted.
In addition, inflationary pressures have generated a revaluation of bond market prices in general, resulting in higher financing costs in the primary market.
The Spanish public sector placed a total of 27,625 million euros through public operations in the first quarter through eight syndicated operations, 16% less compared to the first half of 2021.
The Kingdom of Spain was the main issuer in the public sector, while Banco Santander, BBVA and CaixaBank stand out at the corporate level.
This last segment has been the most affected by the current economic context and has registered a drop of 67%. García has highlighted that it comes from a time in which significant liquidity buffers have been accumulated due to the uncertainty caused by the pandemic and with the ECB buying a substantial part of what is issued in the primary market.
The ‘high yield’ was not very active in the first quarter, which García considers “normal”, since credit with lower credit quality suffers more in situations like the current one, while green bond issues have maintained a trend of relative growth with respect to the total volume issued in the market.
Regarding mortgage bonds, Cortezo stressed that “a flood is not expected” after the entry into force of the new legislation, to which financial entities have had to adapt.
