- The Spanish economy is expected to grow by 2.2% in 2003,
exceeding by far the 0.9% estimate for the Eurozone.
- Over the last few years the IBEX 35® Index has outstripped other European indices in terms of return and risk.
Bolsas y Mercados Españoles (BME), the company that integrates all the securities markets and clearance and settlement systems in Spain, has set up an action plan to promote investment in the Spanish cash and derivatives equity markets.
Bolsas y Mercados Españoles's goal is to provide national and international professional managers as well as retail investors with a picture of the Spanish economy in order for them to tap into the potential and comparative advantages of the Spanish economy.
The IMF's estimates for the year 2003 indicate the Spanish economy will grow by 2.2%, which exceeds by far the 0.9 % forecast for the Eurozone. According to the Instituto Nacional de Estadística (Spain's National Statistics Institute) the Spanish economy has grown by 2.1% in the first quarter of 2003, thus exceeding analysts' expectations. Worth mentioning also is the pace followed by the job market and the lower public deficit.
The action plan stems from the conclusions reached by BME over the last three months after intensive fieldwork on the matter. The action plan will comprise different activities which will take shape in the form of specific initiatives in the commercial and educational fields as well as through debates and meetings with the financial community and diverse communication activities.
The performance of the Spanish economy and its positive prospects show Spain as an investment opportunity in Europe and Spanish equities as the ideal financial asset, especially in the long term. According to total return indicators for the Spanish stock exchange between January 1980 and January 2003 Spanish equities have offered cumulative annual returns of 17.86%.
BME will start this project with "Iniciativa IBEX®", which aims to promote the Spanish benchmark, IBEX 35®, and thus investment in Spanish equities. This index represents the best Spanish companies and therefore the Spanish economy.
At the end of the year 2002, the total value of assets managed by the companies that make up the IBEX 35® came in at 971,968 million Euros, which represents a 95% increase compared to 1995. The fact that it represents 140% of the GDP in 2002 gives an idea of its importance. The IBEX® index reflects the market value of a well represented group of companies from the main sectors of the Spanish economy. The index expresses in just a figure the price variation of a number of companies that from the mid 90's an average capitalisation higher than 50% of the Spanish GDP. The efforts aimed at a wider use of the IBEX 35® will include active commercial policies regarding the index licences and applications, presentations and meetings with professionals from the financial sector, technical and commercial advances achieved in the market-data dissemination process, incentives given to the management of Spanish stock portfolios and a greater dissemination of the calculation, function and modifications of the index.
The IBEX® index fully takes in the liquidity and transparency potential of the market. The best measure of this liquidity is the spread between the best offer and bid prices given at any moment for the index constituents. Between February 2002 and April 2003, the spread was 0.185 %, which is a very competitive result in comparison with the indices of Germany, France and Italy and outstrips the London benchmark.
Another characteristic of the IBEX 35® is its lower risk in comparison with other indices. Over the last three years the IBEX 35® index has performed better than most of international indices which are used by international managers of equity portfolios and it showed lower volatility as well. The Spanish index has outperformed the rest in terms of risk / return.
