Spain Business Brief - Friday October 9 2009

Spain Business Brief - Friday October 9 2009
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By h.b. - Oct 9, 2009 - 1:35 PM
Telefónica ups its dividend to shareholders

Telefónica logo

Despite the recession, Telefónica has kept the dividend for its shareholders, and announced a 21% increase to 1.4 € per share for next year. The communications giant says it wants to beat even that with a payment of 1.75 € per share in 2011. The company is forecasting an increase in income next year of 1% and 4% after that.

The bad debt level in shops and stores across Spain has reduced to less than half it was at the height of the recession. Latest numbers from the National Statistics Institute say the bad debt level on returned instalment payments was 600 million € in August, 54.2% lower than for the same month a year ago. The proportion of bad debts to payments was 4.5%, and the average unpaid amount was 1,877 €, 34.5% lower than a year ago.

The Organisation for Economic Cooperation and Development, the OECD, has said that economy is improving. In its latest report it highlights that France and Italy look like seeing ‘a potential expansion’, and also revise their predictions for Spain upwards slightly.

Spanish Minister for Industry, Miguel Sebastián, has suggested to the German Government that a joint meeting be arranged with the new owners of Opel, Canadian company Magna. The Minister has said he will travel to Berlin for a meeting with Magna management as he tries to save 1,350 threatened jobs at the company’s plant at Figueruelas, Zaragoza.
Meanwhile in the UK Peter Madelson has said that Britain will not support the Magna plans for Opel and Vauxhall.

There has been certain panic on the money markets today as the dollar continues to fall. The Euro is now at a yearly high against the American currency, despite the intervention by several Asian banks to prop up the dollar.
It follows the decision of the ECB to keep interest rates at 1% yesterday.

The end of the Government’s scrapage program here has resulted in a huge boost in car sales. 15,342 new cars were sold in Spain over the first week of October, 76% more than for the same period a year ago.

The merger of the Catalan savings banks, Caixa Catalunya, Manresa, and Tarragona, has been set to be made official on Tuesday, when the boards from the banks will all give their approval. The resulting bank will be the second biggest savings bank in the region, behind only La Caixa, and will become the 4th largest in Spain.
It’s a symptom of the consolidation being seen in the banking sector because of the recession.

The Minister for Housing, Beatriz Corredor, has admitted that the Public Company for Rentals, SPA, was technically bankrupt last year, with losses of 21 million €, and that the Government had to make an extraordinary payment of 8.5 million € to keep it in action.

And finally,
Speaking in the Senate, the Minister for Tax and the Economy, Elena Salgado, has likened the Spanish economy to a woman – where the work is double. She told the chamber that the worst of the recession had passed but there were still some ‘difficult moments’ ahead, particularly in unemployment.

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