CORPORATE | 02.06.2021
“Companies must be profitable irrespective of regulation”
Alberto Matellán, Chief Economist at MAPFRE Inversión, believes that the reason lies in the current narrative, based on high inflation and the uncertainty caused by the central banks. “It is likely that this narrative will change and investors will have another view.” In contrast, he claims that the large amount of money in the market and the upward revisions in profits are the main culprits of recent historical increases in some European indices.
On the macroeconomic front, the expert defends the position of the ECB, which argues that the eurozone’s economic recovery is progressing faster than expected: “In the last six months, Europe has been giving us better economic data than expected. It is peculiar; something like this is rarely seen.” With promising forecasts, he explains that oil prices, at a two-year high, “are rising thanks to the forecasts, as soon these fall, oil prices will stop rising.”
Looking at the US economy, he does not believe that there will be many changes in monetary policy, although he believes that a debate on the end of monetary stimuli is looming and this should be “healthy and necessary.” With US employment data just around the corner, Matellán notes that there may be a significant rebound. However, he clarifies that the situation is unique: “Although the data is interesting, we should not focus on a specific piece of data. What we need to do is to look at the trend over several months.”
Turning to the European continent, and more specifically to the Spanish electricity sector, Matellán assesses that investment should not be made on the basis of regulation alone. “In order to be an interesting investment opportunity, companies must be profitable irrespective of regulation.” That said, from his point of view, marked regulatory shifts may detract from market appeal in the long-term, and “what the investor is looking for is legal stability.”
Finally, in the coming weeks, the economist will be looking more closely at the key factors when training to be a good investor. On this occasion, he stresses the importance of reading ancient literature prior to becoming a private investor.