The CNMV bets on an Ibex-50: it wants more companies and diversification

SantanderThe president of the National Securities Market Commission (CNMV), Carlos San Basilio, has argued that the Spanish stock market should grow in listed companies and diversification. "We should have an Ibex-50, with companies with high capitalization and liquidity, and that could be a market as diversified as possible," he stated during his intervention at the summer course of the UIMP and APIE held this week in Santander.

San Basilio lamented that the Ibex-35 – the benchmark selective index on the Spanish stock exchanges – only analyzes the behavior of the 35 most liquid and capitalized companies, that is, with the highest stock market value, and argued that the number "should be higher".

In parallel, he regretted that "the stock market is so concentrated" in banking activity. The index includes six entities – CaixaBank, Banc Sabadell, Banco Santander, BBVA, Bankinter and Unicaja – which represent more than 40% of the selective index. This call for diversification and growth of the Spanish markets does not prevent San Basilio from considering it positive for the Spanish economy that the Ibex-35 has "very solid banks, with good valuation and prospects". In fact, he considered that "it would be good" if "there were more companies of this size in the listing".

Distancing between markets and the environment

As on other occasions, San Basilio has warned that the low number of stock market listings in Spain "continues to be one of the pending issues" – this year there has only been one, that of the Asturian engineering company TSK – and has called for action to "reverse the situation". The president of the CNMV has championed the offer of European stock exchanges over American ones, and has said that the Old Continent can "offer these exits".

The markets have experienced "an increasingly positive evolution" in the last two years, which has placed them at "historic highs". In this scenario, San Basilio has asked for "prudence" and has urged investors to "be especially selective". "Not everything goes up all the time", he warned.

In a context of global uncertainty and geopolitical tensions, he has considered that there is a "certain distance between the markets and their environment", because it does not have a "significant impact" on the stock markets.

Review the law of operations

Even though the ffailure of BBVA's takeover bid for Sabadell it is far away, San Basilio has argued that precisely the fact that it has been left behind "is a good reason" to review Spanish regulations governing tender offers.

According to him, the rule has "areas for improvement" – he has spoken of drafting "errors" – although the reform "is not an urgent necessity". The regulator has "some ideas" that he will convey to the Spanish government, which is responsible for driving the initiative.