Bestinver warns of the loss of attractiveness of Spain: “Investors have placed us on the periphery”

Bestinver has consolidated its change of course after the incorporation of the  Fidentiis Gestión and it has done so in the midst of a pandemic, a circumstance that has forced it to rethink part of its positions. The Acciona property manager has presented its quarterly letter and its managers have influenced the current impact of the coronavirus on the markets, including the Spanish one. In this sense, Bestinver assures that the crisis has hit Spain especially due to the very characteristics of its economy and that has caused investors to see fewer reasons to invest in our country.

“They have placed us among the countries of the periphery. We are the economy that is suffering the most and also the most affected in the health sector and, in addition, the political issue does not add much, “he assured Ricardo Seixas, director of Iberian Equities of the firm. In spite of everything, Seixas trusts that the country will benefit from the momentum of recovery when that moment occurs.

To deal with this context, both nationally and internationally, Bestinver has relocated its portfolio and the financial sector has been one of the sectors that has undergone the most changes. “We have reduced around 50% of our exposure to banks,” especially in the international arena, due to the “rule change” that the pandemic has caused and the effects that low interest rates are having and they will have in the banking business. “The Covid-19 has moved the goal of site, the interest rates affect the margin of the business model and the cost of default will rise and we do not know for how long.” Furthermore, the ECB’s obligation not to distribute dividends “reduces the margin of safety,” he said. Tomás Pintó, Director of International Equity at Bestinver, during the presentation to the media.

In the Iberian portfolio, however, the changes in the sector have not been so resounding. The manager has left Sabadell, but the weight of Bankinter and CaixaBank in a transfer that sought links with entities that had less dependence on the SME sector and more trust. “The transfer responds to the balance sheet capacity of Bankinter and CaixaBank, as well as to the lower dependence on SMEs in an environment that, depending on the time that elapses, will do more damage and permanently in the credit portfolio” , according to Seixas.

In the Bestinfond part, they have sold Bankinter, “although the position was minimal and not very relevant, while at the same time they have parted company with Société Générale because” it does not have such a solid model or it generates little capital compared to others like BNP or Intesa San Paolo “.

According to the letter to investors, Bestinver recognizes that the banking sector is currently “more investible” than a decade ago, but warns that the pandemic has meant a new tightening of the rules of the game. “The inevitable extension of this zero rate cycle greatly affects their profitability and makes their ability to generate profits and capital very expensive,” the document said.

One of the main novelties comes from the corporate side, since the manager has launched a new fund, Bestinver Corporate Debt, to complete its offering of fixed income products. “It is a fund with a recommended investment term of two to three years that invests in subordinated debt and high-yield bonds,” the letter states.