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  • Stock Market Watch: The Rain In Spain Stays Mainly On The Plain (Plus Spanish ADRs And ETFs) 0 comments
    Jun 12, 2012 10:00 AM | about stocks: BBVA, SAN, TEF, EWP

    The rain in Spain stays mainly on the plain but lately the rain has also been spreading to Spanish ADRs (despite their global footprints) and now to the stock market as a whole. I should mention that most of the Spanish stocks that trade on US exchanges trade on (or have been recently forced to trade on) the OTC market. However, investors and traders alike looking to trade Spanish ADRs listed on major US markets should consider the following:

    • Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA). With a presence in 32 countries mostly in Latin America plus the USA, Banco Bilbao Vizcaya Argentaria SA (BBVA) is over 150 years old - which may or may not be reassuring for buy and hold investors. BBVA is down over 26% since the start of the year.
    • Banco Santander SA (STD). As the largest lender in the Eurozone, Banco Santander SA (STD) has plenty of exposure to the European mess as a whole. Nevertheless, the Banco Santander SA (STD) dates back to 1857 and its among the top 15 financial institutions worldwide in terms of market capitalization - meaning its "too big to fail." STD is down over 21% since the start of the year.
    • Telefonica SA (NYSE:TEF). With a presence in 25 countries, Telefonica SA (TEF) serves over 300 million customers in Europe, Africa and Latin America. TEF also ranks sixth in the telco sector worldwide in terms of market capitalization but its still down about 30% since the start of the year.

    As you can see, all of the Spanish ADRs are actually sizable and fairly solid multinationals with operations spread throughout the Spanish speaking world or globally but due to being based in Spain, the market is raining on them and will probably continue to do so.

    More adventurous traders and investors should take a closer look at the iShares MSCI Spain Index ETF (NYSEARCA:EWP) - an ETF that attempts to track all publicly traded securities in the Spanish market as measured by the MSCI Spain Index. The EWP has a market cap of $132 million and it's down 24% since the start of the year - meaning it's not particularly better or worst than the three previously mentioned Spanish ADRs.

    However, investors should keep an eye out for any news regarding Spanish bond auctions and ratings, especially any ratings downgrades, on Spanish bonds and debt in general. After all, a poor bond auction or a ratings downgrade will (fairly or unfairly) impact Spanish ADRs.

    Finally, it might be a good idea to add the above Spanish ADRs and ETF to your NextCandle.com My Portfolio page in order to keep an eye on them. After all, there will be both trading opportunities with Spanish ADRs thanks to the volatility engulfing European markets and a good chance to pick up shares (on the cheap) in what appears to be solid companies.


    Stocks: BBVA, SAN, TEF, EWP
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