MADRID — Like other Spanish builders, Fomento de Construcciones y Contratas, or F.C.C., had struggled to convince investors that it could extract itself from Spain’s housing market quagmire.
In the last six months, the management of F.C.C. was on an almost
continual investor road show in the world’s financial capitals. The
campaign finally yielded fruit Oct. 21, when the company announced the
sale of 6 percent of its equity to Bill Gates, the co-founder of
Microsoft, for 113.5 million euros, or $154 million.
Two days after Mr. Gates’s purchase, as it happens, the Bank of Spain
said the country had pulled out of recession and returned to growth of
0.1 percent in the third quarter after nine consecutive quarters of
contraction.
Both announcements appeared to confirm what many Spanish executives and
the government of Prime Minister Mariano Rajoy had been asserting for
months: that Spain deserved its place back in the sunshine.
There are, of course, plenty of clouds still hanging over Madrid — so
many that on Wednesday the Spanish economy minister, Luis de Guindos,
warned against triumphalism, telling members of the Spanish Senate that,
at a time of near-record joblessness of 26.6 percent, nobody should
claim that “all is well.” Overall growth is expected to remain anemic
for several years.
Still, the speed of the turnaround in investor sentiment has been striking.
“What is truly remarkable is that Spain is suddenly flavor of the month,
when until recently investors smelled a rat here,” said Gonzalo
Díaz-Rato, who advises international funds on buying Spanish assets.
Three weeks ago on a visit to New York, Emilio Botín, the chairman of
Banco Santander, told reporters that Spain was in “a fantastic moment.”
He added: “Money is arriving from everywhere.”
Although Mr. Botín’s optimism raised eyebrows back home, especially
among ordinary Spaniards struggling with austerity budgets and
joblessness, most indicators add credence to his assessment.
Foreign direct investment doubled in the first eight months of this year
to €19.4 billion, according to Mr. de Guindos, the economy minister.
That was thanks in part to Ford and other carmakers that have been
expanding production here. For all of 2012, foreign direct investment
had fallen to €21 billion, from €30 billion in 2010, when Spain briefly
returned to growth.
Spanish banks, whose loan defaults forced Spain to negotiate a European
bailout last year, have since then been able to sell assets and reduce
by three-fourths the level of exposure to troubled real estate loans
they had before the rescue. Last month the main Spanish stock market
index climbed to its highest level since July 2011, although it has
since slipped back a bit. And Friday, the credit rating agency Fitch
upgraded Spain’s outlook to stable from negative.
How far can this Spanish recovery continue?
“Very” is the answer that Arcano, a Spanish wealth advisory and asset
management firm, provided in a report published in October.
The analysis compared the situation of Spain with that of Germany a
decade ago, when Berlin managed to turn around its current-account
deficit — a broad measure of a country’s trade performance — and embark
on an export surge that has more recently allowed Germany to weather the
financial crisis better than most other European nations.
“Spain is now in a position to achieve that kind of German recovery,” said Ignacio de la Torre, a partner at Arcano.
Aiming to ride this wave of optimism, the government has revived a
privatization program that was shelved two years ago because of Spain’s
downturn. In coming months, it is expected to sell as much as 60 percent
of Aena, the national airport management company. Analysts value Aena
at about €15 billion, but that includes a debt of €12 billion.
But the fact that Spain has been in and out of recession since the start
of the crisis — briefly returning to growth in 2010 before sinking into
its banking crisis — has also left some economists skeptical about the
staying power of the latest recovery.
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