Tick, tock, tick, tock. There is not much time left in the year to make an assessment of where Spanish stocks stand and look ahead to what the new year will bring. Uncertainty and hesitation throughout the periphery has caused Spanish stock market earnings predictions to fall back 6.91 billion euros for 2012.
But not all the news is negative. Confident that many of the Ibex 35 companies can improve their results, experts estimate that the Spanish index will see 43.33 billion euros in profits next year. If the prediction pans out, earnings will improve on those seen in 2011, which were 39.66 billion euros) by 9.26%.
Grifols, Acerinox and Telefónica should post the largest gains. Unexpected after effects of the sovereign debt crisis have translated into a lasting lack of appetite for equities. With less than fifteen days remain in the year, the Ibex 35 is down nearly 17%. Even though it is the least hammered stock market in Europe, a majority of the companies on the index have learned to safeguard their earnings this year, considering that only fourteen stocks (40% of the index by number of companies) will end this year worse off than last.
The situation will likely repeat in 2012. Market consensus according to FactSet predicts that thirteen companies will see losses as European leaders failed to make concrete agreements and the sovereign debt crisis that began in July continues. Lack of confidence has clouded over expectations for the next year for most Ibex firms.
The pullback lost momentum after an agreement coordinated by global central banks and fiscal reforms developed by Eurozone countries injected new confidence in the world economy.
