A Lethal Cocktail
After years of uninterrupted domination, the old guard at Spain’s Ibex 35 stock index – two mega-banks Banco Santander and BBVA, oil giant Repsol, telecommunications behemoth Telefonica, and utility Iberdrola – is beginning to lose it.
One of the main reasons for this is their massive exposure to emerging markets — in particular Latin America, whose commodity-rich economies are now suffering the fallout from dwindling Chinese demand. In the aftermath of Spain’s real estate collapse, when opportunities at home were almost non-existent, Latin America’s fast-growing economies were a godsend to many of Spain’s biggest companies. But they are fast becoming a curse…
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