Spanish Property Market to Recover in 2016

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Recently Madrid-based influential real estate market analysts R.R. de Acuña & Asociados released the annual report on the property market in Spain. Releasing the report, Fernando Rodríguez y Rodríguez de Acuña, president of the company said “There are no green shoots around here” describing the state of the Spanish property market.

This is not surprising since Spain’s property markets has been booming to incredible levels until the credit crisis started. The construction sector offered jobs to millions of locals and migrants alike. However in recent months that has changed dramatically. The unemployment rate in second quarter reached to 17.9% more than twice the European average.

Demand for housing is expected to be about 220,000 homes per year while there were 1.6 million unsold houses at the end of 2008. At these levels it will take 6 to 7 years for the market to recover.

Fernando Rodríguez pointed out that “The market situation doesn’t justify more building, and anyway the banks won’t lend money to build something that won’t sell” and and predicts that 75% of all Spanish property developers will be wiped out in the next 5 years due to excessive debt, the current property market slump and “bad management”.

Mr.Fernando Rodríguez makes an astute observation on the Spanish market. This scenario holds true for the U.S. market as well. There is no reason for developers to continue adding to the existing inventory. However some builders are already starting to initiate new development plans here.

Due to their significant overseas presence, the two largest banks of Spain, Banco Santander(STD) and BBVA(BBV) are not impacted heavily by the domestic housing market collapse. In addition to Europe, Latin American these two banks are also concentrating on expansion in the U.S. Santander bought Sovereign Bank and more recently BBVA acquired the failed bank, Guaranty Financial of Texas.

A Look at Foreign Bank Stocks Traded in OTC Markets

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In addition to the foreign banks listed in the New York Stock Exchange(NYSE), there are many banks that trade on the OTC markets. Some of the banks moved to the OTC a few years to due to the high listing fees charged by the New York Stock Exchange. Others prefer the easier listing and regulatory requirements of the Over-The-Counter markets.

The table below lists forty two foreign bank stocks that trade as Sponsored ADRs in the U.S.:

[TABLE=179]

Some of the stocks shown above have very light trading volumes.Others do not trade at all on a daily basis. Though these trade on the OTC markets, some of them are large banking groups in the home countries. For example Societe Generale (OTC: SCGLY) and BNP Paribas (OTC:BNPQY) branches can be found through out France. Both the banks have decent daily trading volumes and are up about 50% and 92% respectively YTD.

Among the Asian banks, Singapore-based banks United Overseas Bank(OTC:UOVEY) and DBS (OTC: DBSDY) are stable long-term growth stocks. As Singapore and other South East Asian countries recover from the recession DBS and UOB will perform well.

Among the lesser known banks, DNB Nor ASA of Norway(OTC:DNBHY), NedBank of South Africa (OTC: NDBKY) and Hang Seng Bank (OTC: HSNGY) of Hong Kong can be researched further for potential investment opportunities.

Knowledge is Power: The Financial Crisis Already Behind Us? Edition

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There is clearly a class of people who do not face the full force of the law because of who they happen to be. The same stunning level of corruption is also true for banks, bailouts and financial systems. This will be the unsavory legacy of the Lehman Brothers aftermath.Moral hazard is back

Opponents of overhauling U.S. health care argue that Canada shows what happens when government gets involved in medicine, saying the country is plagued by inferior treatment, rationing and months-long queues.Canadian Health Care, Even With Queues, Bests U.S.

Interview with IMF Head Dominique Strauss-Kahn: ‘It Is Dangerous to Think the Financial Crisis Is Already Behind Us’

Neeraj Mehta likes saving money but is turned off by the ultra-low interest rates offered by Canadian banks.Banking on India

Guest Post: Are Financial Blogs Trustworthy?
By George Washington of Washington’s Blog.
The talking heads say that financial blogs aren’t trustworthy.But the whole debate about blogs versus mainstream media is nonsense.

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