Financial institutions take center stage in the Ibex 35. The sector is one of the sectors with the greatest weight in this index, which will be consolidated with the entry of Unicaja Banco, so the good progress that is expected for banks will serve as a boost for the Spanish selective, according to Bankinter Investments. Banks face 2023 with tailwinds on the stock market, among which are the increase in interest rates and the repurchase of shares, a trend that they have embraced strongly in the last year and that could lead them to rise to double digits in the Spanish market.
After a year full of turbulence in the markets, Bankinter’s analysis and markets department sees a potential of 12% in the Ibex, with the possibility of reaching 9,093 points in 2023, compared to the level of 8,100 at which It is moving at the present time and with an annual decline of more than 6%. The potential is in line with that expected for the S&P500 (+11.6%) or the Eurostoxx 50 (+14.4%). “Volatility continues to be low and nothing suggests that it is significantly, which indicates that the trend of progressive recovery of the stock markets will gain consistency”, indicates in the report ‘Investment Strategy 2023’.
The financial sector is one of its big bets for next year, especially the European ones. CaixaBank, Sabadell, Citigroup, ING or BNP are some of the recommended companies. In its portfolio there are also firms in the technology area (Apple, Microsoft or Alphabet); renewable (Iberdrola or Acciona Energía), automotive (BMW or Mercedes Benz) or infrastructures (Ferrovial, ACS or Cellnex).
In a context dominated by a restrictive monetary policy, the director of Bankinter’s Analysis and Markets department, Ramón Forcada, sees the end of interest rate rises before the summer, although the CPI remains high for two or three years . “Central banks know that to bring inflation back in the short term they have to raise rates much more, but they know that they cannot apply such harsh policies,” he suggested, because they would do “a lot of damage” to employment and private consumption.
On the other side of the coin is fixed income, with yields on sovereign bonds at levels unheard of in a decade. In this regard, Bankinter sees opportunities in the medium term (two/three years) where interest rate sensitivity is low and in high-quality corporate bonds.
With stock markets enduring uncertainty after a year marked by the war in Ukraine and inflation, they forecast a “brief and shallow” recession in the euro area during the first part of the year. More optimistic is with Spain, which revises the GDP by 0.4 tenths upwards for this 2022 and places it at 4.7%, to drop to 1.1% in 2023. It will not be until 2024 when there will be a higher rebound to 2% and recover the levels prior to the Covid pandemic.
