Only 15% Of European Companies Will End The Year In The Black


Less than two months remain in 2011 and barring some miracle, the main European markets will all finish in the red for the year.

The myriad events that have happened in the past 10 months (Arab spring, the Fukushima nuclear crisis, fear of global recession, debt crisis in peripheral Europe) has weighed heavily on markets.

Only 14.7% of the companies listed on the principle stock indexes in Spain, Italy, Germany, France, Portugal and Greece will escape annual losses.

Surprisingly, the majority of companies posting positive numbers are in Spain and Germany.

The confusing and hesitant economic environment in which we have found ourselves has not encouraged positive equities markets, judging by stock market developments.

Fear that other countries, mostly Spain and Italy, are the following pieces in crumbling the Eurozone puzzle has caused indexes in these countries to fall 13 and 24%, respectively.

The EuroStoxx 50 and France’s Cac 40 are other punished indexes. They have lost around 18% on the year.

Why? The banking sector has been hardest hit in Europe, losing more than 30% on the year. Still, now experts think that equities should be in investor portfolios from now until the end of the year.

We aren’t always at the end of the line

The constant pressure from European authorities to impose more defecit-reducing cutbacks caused investors to flee in mass exodus from Spanish equity. Nonetheless, the Ibex 35 has many companies in the black.

Specifically, nine out of 30-five companies on the Ibex 35 index have increased in value this year. But some particularly dramatic price drops came from Acciona, Mapfre and Grifols, all of whom lost more than 25% of their share value.

The change in view for some sectors, such as infrastructure, has permitted other companies in the sector (Ferrovial, Sacyr) to slip into the acclaimed group that BME, Inditex, Gas Natural and Bankinter also belong to. In Germany’s case, the healthcare sector is posting the most gains. Also, SAP, the sporting goods brand Adidas and the auto manufacturer Volkswagen have done well so far.

Between 15% and 20% of stocks in Portugal, Italy and France have increased in value during 2011. Gains for the Italian companies Lottomatica and EADS (on the Cac 40) are the strongest at around 43% and 22%, respectively.

This post orgiinally appeared at El Economista.

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