Spain Leads Global Real Estate News | May 14, 2012
Banking shares continue to fall, and a bond issue was covered but only at higher interest rates. The banks are concerned about the new demands from the Government demanding they make more provisions to cover their Real Estate portfolios.Olli Rehn, EU Economy Commissioner – Photo EFE
A bleak Monday morning on the Spanish Markets today. The IBEX 35 had fallen 2.75% by 11am and all the shares were down, led by Bankia which continued it fall, down 7.34% to just 1.92 €.
The banks have been hit with the news that they need to make more provisions under yet another new Government regulation, having to cover 15 billion in total.
Bankia has to find 4.722 billion, Caixabank 3.389 billion, Popular 2.314 billion and the BBVA 1.8 billion.
The Risk Premium has risen amid fears that Greece could leave the Euro.
Today the Eurogroup will examine the latest reforms from the Rajoy government. Together with concern about Spain’s banks, the European Commission is worried about the state of the regional government finances in Spain.
The European Economy Commissioner, Olli Rehn, welcomed the ‘decisive’ reform, the fourth, of the Spanish banks. He said it should dissipate the prolonged doubts about stability in the sector, and said it was the cornerstone of Spain’s answer to the crisis.
The treasury has managed to place 2.9 billion € in bonds this Monday morning, but only by paying a much higher interest because of the increasing tension on the markets. The objective was between 2 and 3 million, and it placed 2.19 million at 12 months at 2.985% (compared to 2.622 last time). It also placed 710 million at 18 months for 3.302% (3.11% in April). This was the first auction since the nationalisation of Bankia and the Government’s latest financial reform which obliges the banks to destine another 30 billion to cover the real estate and promoters sector.
Curtesy of Typically Spanish