StockSpain

Luis Portillo, who is the major shareholder of Inmobiliaria Colonial, has agreed to transfer part of his stake to banks in order to repay debt.

Former Chairman Luis Portillo transferred 149.7 million shares, which account for 9.2 percent of the company, to Banco Popular, according to a regulatory filing released today. He also gave up 88.8 million shares (5.4 percent of the total) to La Caixa, 54.8 million shares to Caja de Ahorros de Galicia, 45.3 million to Bancaja and 7.5 million shares to Bankinter.

Colonial was suspended from trading in Madrid today, something which has already occurred eight times in 2008. The company has lost 75% of its market value in just six months as sales swindled and banks called in loans to Portillo, who left the company in December. Colonial owes 8 billion euros ($12 billion) to banks including Goldman Sachs, Royal Bank of Scotland and Credit Agricole.

The stock last traded at 88 cents, giving Barcelona-based Colonial a market value of 1.4 billion euros. The drop in the company’s value attracted takeover interest from Investment Corp. of Dubai and General Electric Co., but in the end there was no agreement between them on the value of the company.

At present time, Spanish house prices are falling in real terms, something that have not been experienced for more than a decade. The average price of houses and apartments rose 4 percent in the first quarter from a year earlier, less than March’s 4.6 percent rate for consumer price inflation, according to a Housing Ministry’s statement released on April 18.

MFAO, based in Spain, is the only market in the world where futures contracts on olive oil can be traded.

The market, which was created four years ago, has been mainly used by olive growers to protect themselves against price swings. Olive oil prices are exceptionally volatile, so both growers and producers have an incentive to use futures in order to hedge against price fluctuations. However, MFAO wants to go further, and it is now planning to attract speculative investment by major financial institutions.

MFAO already counts with two important members trading from their screens: Banco Popular and savings bank La Caixa. Besides, they are in talks with “giants” such as Banco Santander, BBVA and JPMorgan, as well as the London desks of commodities traders.

But whether the big financial players are ready to start trading olive oil futures is still uncertain. Financial institutions demand liquidity, so volume needs to increase dramatically if the market wants to avoid the way of the Spanish citrus fruits futures market, which was abandoned not long after being set up back in 1995.

Spain is the world’s biggest olive oil producer, accounting for 40% of the 2.5 million tonnes produced worldwide every year. Yet, there is little MFAO will be able to do if strong competitors, such as Chicago’s Board of Trade, decide to emulate their initiative before it manages to establish their market.

Link: http://www.mfao.es (the site has an English version).

Repsol YPF, the owner of 25% of the Carioca oil field offshore Brazil, had a record gain in Madrid trading after the Brazilian authorities said the field is probably the largest oil discovery in the last three decades, and the third-largest ever drilled.

Repsol rose as much as 3.25 euros, or 14 percent, to 26.75euros, the biggest increase since the company sold shares to the public in January 1990. It closed the day at 25.68 euros, a 9.277% increase that erases all Repsol’s stock losses for 2008.

Petrobras, the Brazilian oil giant who owns 45% of the project, said yesterday that more investments are required to drill new wells, and conclusive data on the discovery’s potential will only be known after the other phases involved in the assessment process have been completed. Petrobras shares soared more than 8% in yesterday’s New York trading.

The remaining 30 percent of the project, is hold by BG Group Plc, the U.K.’s third-largest natural-gas producer, BG shares gained as much as 103 pence, or 8.4 percent, to record 1,325 pence in London trading. It closed 5.810 up to 1293 pence.

Pescanova SA, Spain’s largest fish processor, gained as much as 12 percent in Madrid trading after Spanish newspaper “El País” reported that two people have recently died in the country from so-called mad cow disease. The report has been confirmed by the health ministry. This is the first victim of mad cow disease since 2005.

The shares added as much as 3.85 euros to 36.49 euros, their biggest one-day percentage increase in 5 years. The stock was up 7.23 percent at 35.00 euros at closing (5:35 p.m. local time).

Further increases can be expected if more cases are detected in the future, as scared people shift away from meat consumption to its most obvious substitute. However, it is important to bear in mind that even though previous similar news have also had a positive impact on the price of the stock, as it ocurred with bird-flu occurrances, they have never actually had a significant impact on the comnpany’s earnings results.

According to recently released data, the Spanish stock market has a total market capitalization of US$ 1.93 trillion. This places it at number 7 on the list of the world’s largest stock exchanges, which is not bad at all for a country of 45 million people.

Here is the full list of the Top 10 Stock Exchanges by market capitalization:
(Figures in trillions of U.S. dollars)

1. NYSE - $21.79
2. Nasdaq Stock Market - $11.81
3. London Stock Exchange - $7.57
4. Tokyo Stock Exchange - $5.82
5. Euronext - $3.85
6. Deutsche Boerse (Germany) - $2.74
7. BME Spanish Exchanges - $1.93
8. Borsa Italiana - $1.59
9. Swiss Exchange - $1.40
10. Korea Stock Exchange $1.34

Source: Reuters and World Federation of Exchanges Web site

It is interesting to note that exchanges in emerging countries such as China, Russia or Brazil are still not on the Top 10. However, recent stock exchange mergers and the growth of these and other stock markets will result in a significant variation on this Top 10 in a few years.

The main Spanish stock exchange (known as Bolsa de Madrid) was officially founded in 1831. It now consists of 41 major financial institutions and 12 established securities dealers, and about 1500 domestic and foreign companies had their equity securities listed on it.

Trading hours are from 9 to 17:30 GMT+01:00.