Cast as the sick man of the eurozone a year ago, Spain seems at last to be luring back investors, despite lingering threats to its recovery.
“Viva Espana,” blared a recent report by the global financiers Morgan Stanley, advising clients to invest in bonds from the eurozone’s fourth-biggest economy, which came close to a full bailout last year.
“Last year, a bit before September, everything was different. We were trying not to read analysts’ reports so as not to get depressed,” said Antonio Carrascosa, leader of Spain’s state bank-restructuring fund.
“Right now, it’s the opposite. We are seeing the start of a recovery,” he said.
Having risen in the middle of last year as investors shunned the country, Spain’s sovereign borrowing costs — the yields or rates of interest it must pay on the debt markets to finance its public spending — have fallen sharply.
In July last year, the yield on its benchmark 10-year bond was around 7.5 percent — a level considered unsustainable by economists. It is now around 4.4 percent.
The Madrid stock market has just broken back through the 9,000-point barrier for the first time since October 2011.
“The concerns that were on the world’s front pages a little over a year ago have disappeared,” Carrascosa said.
Scrambling last year to stabilize public finances, Spain’s conservative government introduced a series of austere reforms, including spending cuts and looser hiring-and-firing laws for companies, plus a shake-up of the banks to bolster their balance sheets and purge bad loans.
“With regards to structural reforms, certainly Spain, versus its neighbors, seems to be an exemplary case for progress, namely on the issues concerning the financial sector, labor market and fiscal framework,” Morgan Stanley’s analysts wrote.
The government is forecasting that the current quarter will see an end to the recession — the second in a double downturn sparked by the collapse of a construction boom in 2008.
The government’s latest forecasts tip a 1.3 percent contraction in overall economic output this year before a return to growth of 0.5 percent next year and 1 percent in 2015.
The towering unemployment rate is currently forecast to stand at 27.1 percent at the end of this year and 26.7 percent next year, staying above 25 percent till 2016.
Others were also cautious.
“We are very much in wait and see mode,” DBRS sovereign ratings head Fergus McCormick said.
His agency currently scores Spain at “A minus” with a negative outlook, indicating it is creditworthy, but at risk from economic shocks.
McCormick said he is looking for “signs of progress” in cutting the deficit, job creation and structural changes, warning that more unpopular labor reforms may be needed.
“I think the greater concern is the stability of the housing market,” he said.
Spain’s banks have drawn more than 41 billion euros (US$55 billion) from an emergency eurozone credit line, but remain weighed down by unsold buildings and unpaid loans.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day