La Gran Banca, a collective name for the top five banks in Spain, has boosted its holdings of Spanish debt. Yields offered on the debt have led lenders to place bets on the product, despite the anxiety riddling the markets. Collectively, Banco Santander, BBVA, Bankia, La Caixa and Popular increased their risk profile by 1.8% during the first nine months of the year.
Purchases of around two billion euros were finalized before the EU forced the sector to discount debt bonds so that they would be in tune with market prices, making sovereign debt an unsure investment.
The Gran Banca had put up 102.4 billion euros as of the end of September according to data provided by the European Banking Authority (EBA). The figures point out differences in positions of two lenders. La Caixa is the only bank to have substantially reduced its exposure to sovereigns, trimming by 13%. Bankia, on the other hand, has upped the level of sovereign debt in its portfolio by a whopping 18% since the end of last year, adding a total of 24 billion euros. Santander still leads the pack after buying over 34 billion euros for a percentage increase of 4.5%. BBVA lowered their exposure slightly by 1.4%, and Popular has backed off by 8.4% if we take data from the ongoing Pastor deal into account.
The Ibex 35 will include 36 companies for the first time because Bolsas y Mercados Españoles will not be dropped from the index at this time. The supermarket chain Dia will be officially added to the Ibex 35 after January 2 following a decision made yesterday by the Comité Asesor Técnico (CAT). Until now there were no major surprises in revising the index. But the unexpected occurrence now is that BCE did not leave an empty seat as expected, and with one company coming and none going, the Ibex 35 will break with the number 35 and keep 36 companies on the index for the time being.
Experts practically took it as a given that Dia would be added to the index and they suspected that there were many chances that this would happen during this December's revision to the list. Members of the CAT had zero doubts either. "We think it is pretty clear that the stock will get on the list," assured CAT president Blas Calzada.
Still, it was hard to tell if the company would definitely end up on the index. "There are special circumstances that have a negative, temporary effect on the liquidity of some companies on the index," the CAT pointed out. The special circumstance in this case is none other than the prohibition of "establishing or adding to" short positions in financial companies, and whether the Ibex will return to having 35 companies again will depend on the permanence of this rule. The next revision to the list will take place in March, but the CNMV prohibition on short-selling is the main problem right now, and it is being backed by other countries and will remain in effect indefinitely.
