Spain Business Brief - Monday August 3 2009

Spain Business Brief - Monday August 3 2009
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By h.b. - Aug 3, 2009 - 1:58 PM

EFE archive

Consumer confidence continues to recover in Spain

Consumer confidence has risen for the 5th consecutive month in Spain according to the index published by the Official Credit Institute. Confidence is back to the level seen at the start of the recession at 76.1 points – the highest since February 2008. Over July the index rose by 9.7 points. It comes as Spaniards saw cheaper prices in July with more perspective for savings or the purchase of consumer goods.
However any improvement in the Spanish economy is yet to be passed on to the labour market.

Speculation continues in the press about the possible suitors for Caja Madrid, with the main contender the CAM, the Caja Mediterráneo. Interest is higher as it could see Miguel Blesa strengthen his position as President by being named President of the new savings bank formed. Caja Madrid is also being linked to the Caixa Galicia.

Spanish builder Metrovacesa has abandoned plans for an ambitious office block in Walbrook Square in the City of London. The plan was to build and exploit, with the Legal and General company, for 250 years some 87,000 square metres with an estimated value of more than 1 billion €. But now a statement says that ‘adverse current conditions in the international financial markets’ have caused Metrovacesa to ‘definitively abandon’ the project.
It’s estimated the exit of the company at this stage will cost it 117 million €.
Another real estate group Afirma, has seen its shares rally on the Madrid Stock Market today, following the successful refinancing of the company’s debt. A statement from the company said that thanks to the deal its ‘viability in the medium term is assured’.
Debt in the company has reached 1.441 billion €.

Half the new property built in Spain this year has not been sold. The poor balance comes despite the lower numbers of homes being constructed, down 33% to May this year compared to last.
The number of certificates to mark the completion of construction over the first five months of the year was 180,722, but the National Statistics Office says that only 92,731 were sold.

New car sales have stopped recent falls in the month of July which saw 108,222 sales. More than 34,000 people took advantage of the Government’s Plan 2000E. The number is still 10.9% lower than in July last year.

Unión Fenosa has announced a 3.1% increase in profits for the first half of the year, but thanks to extraordinary items – the sale of its shares in Cepsa, Isagen and Red Eléctrica. Profit for the six months came in at 672 million €.

The price of olive oil has risen by 25% over recent weeks as demand has increased and supply has been cut by the program of storing the oil. Products are being stored until the next harvest, and the expectation is for the price to continue to rise.

Despite the crisis German supermarket chain, Lidl, has announced plans to double the number of its stores in Spain to reach a total of 800 to 1000 over the next ten years.
The company opened its first store in Spain in Lleida in 1994 and now has 474 stores operating across the country.
The company puts it success down to its strategy of closely watching the link between an attractive price and quality.

And finally,
The recession has had a dramatic effect on the leisure sailing craft industry. All sectors have seen falls in the number of new registrations, but the areas of sail boats, down 50% and motorboats, down 43.4% lead the reductions for this year compared to last, and see demand back at levels last seen before 2002.

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