Artículo sobre política ecónomica acerca de la regulación de la especulación (versión en inglés)

When risk premium, stock index fall and compulsory purchases are present concurrently.

Leaving aside punctual speculative attacks carried out by hedge funds in February 2010, because it does not usually exist a certain physical or juridical person behind with that purpose, the first investor group is that of non-residents holding 39% of our debt. Thus, it becomes necessary to consider the relation between risk premium and short positions on sovereign bonds. As the reader probably knows, a short position is on borrowed assets directly or not ending up in a positive economic exposure when their quote drops, and on sovereign bonds is usually traded through derivatives, almost always credit default swaps which are non-payment insurances, first and inverse operations taking place in a short period of time. CDSs spreads increased especially on 2 August, 2011 to 418 bps and that day premium reached, though indirectly, 408 bps, on 18 November, 2011 to 499 bps which gave rise to 503 bps, and on 24 July, 2012 to 641 bps followed by the historic maximum until now of 637 bps, respectively. Speculative naked CDSs purchase and reports transmitted a risk perception producing a mass CDSs purchase which contributed to a premium increase and especially to keep it in high values waning thereby bonds liquidity. CNMV forbade short operations at financial sector on 11 August, 2011 and at the rest as well on 23 July, 2012. The problem is that naked CDSs on sovereign bonds, taking into account that allowed not to own the underlying, were not banned so, to my mind, restrictions should have included them and have been set on 28 May, 2012 because that day the premium outranged the highest value of the previous year. In any case, banning could only have likewise been temporary because it would have kept the lack of liquidity for bonds, though this would have been offset slightly by ECB purchases. Which is not possible is to be aware of who went short on naked CDSs on sovereign bonds but the problem would not be solved because it is on the legislation. Fortunately, now the European Parliament and the EU Council forbid it and regulate the OTC market as well as credit rating agencies. However, from my point of view, future Tobin Tax ought to be increased to 0.1% for CDSs short positions on sovereign bonds which must be published by the CNMV and other possibility could be to transfer them to the organized market.

Focusing now the same matter on business sector, short selling on shares is usually carried out directly; speculative shares sale and reports transmit a risk perception which produces a mass shares sale contributing to a quote fall and therefore liquidity wanes. As regards Ibex35 strategic enterprises, and considering that a chain is such strong as their weakness link, the most insolent aggregated short position difference was 5,77% on Gamesa between 9/3 and 15/6, 2012 falling share value 0.87€, it reached a low 1.47€ on 1 June when Ibex35 had their first important droppage and, finally, the quote decreased by 3.77% on 24 July, being the second worst result in a session where Ibex35 reached the historic minimum until now. Date which proves that risk premium also affects the index in one way or another, although going short ban forced to forswear operations on the same day; Gamesa left the index at the beginning of this year due to capitalization permanence requirements. The issue is that temporary restrictions did not cushion falls efficiently because they were laid down belated so, in my opinion, bearing in mind privileged information, banning must begin beforehand. In theory, when premium increases or quote decreases constantly and excessively regarding the context, in practice, when a warning happens, therefore, short positions ban on shares should have been imposed that 1 June. On the other hand, Iberdrola had 19.6% of Gamesa and in the period share fell exactly the same value of 0.87€, so we can realize that it existed a positive though indirect correlation between both hence, in my view, there are not any reasons to think Iberdrola was behind to throw it a takeover. In fact, we can point at the ones to blame: a foreign hedge fund showed a short position difference of 0.46% and two foreign shareholders which probably lent had 7.7% of Gamesa in the period, nevertheless it could come from inside although it is less probably. On 27 May, 2010 CNMV made compulsory to communicate short positions higher than 0.2% of equity on any share or participative quota at primary and secondary markets, but this can be avoided through shell companies. Besides, the commission does not publish identity if it is 0.5% or lower, so my assumption is that for raising transparency it would be better to include and be aware of all shareholders.

Eventually, with regard to our enterprises abroad, the most important conflict arose only a few months after Repsol YPF advertised one of its greatest unconventional hydrocarbons discoveries at the ‘Loma La Lata’ oilfield. The Argentinean Congress approved a compulsory purchase of 51 out of 57,43% owned by Repsol and the dismissal of the whole board of management on 3 May, 2012. However, quote already began dropping noticeably on 16 April when the Government initiated the bill procedure and between both dates fell 3,68 €, being in any case a lesser evil. It was alleged basically that production decrease throughout the last years had been deliberated and was the main cause of the 2011 energetic deficit, but the mere fact that diesel was the most imported fuel betoken that the problem root was situated in their deficient refining capability. Two weeks earlier Repsol put forward them to invest jointly in order to increase production and also proposed to reach a consensus about a new presidency. In my opinion, it would have been better to suggest the resignation to some of their concessions instead of a partnerships seeking project to forswear part of their holding. Furthermore, I believe that Repsol should have kept in touch more regularly or at least informing them what I just have mentioned and their funding need in December 2010 because that year petrol balance of trade turned to be negative due to the non-common one, coinciding also with the fact that the ‘Vaca Muerta’ shale formation discovery was announced. On 3 December, 2012 Repsol registered a complaint to the CIADI. According to the ‘Agreement for the reciprocal promotion and protection of investments’, which went into effect in 1992, a compulsory purchase only may be ensued by public usefulness causes. I would argue it was not abided by because Total Austral was the first in natural gas production with almost a quarter more, which was the second hydrocarbon more imported but by far the one with the highest consumption that exceeded its production. Other aspect is that it must not be discriminatory, and I think it was not because the next owner with more weight was the Argentinean group Petersen, which had been joined at the request of the Government and it had less than a half of the shareholding. It is also foreseen a suitable compensation without unjustifiably delay; past 26 June Repsol turned down the first and last until now offer which not only even reached the middle of the total demanded, but also it was distributed between holding and obligated investment equity in a partnership formed by YPF and Pemex.

Hereupon, shorting prohibitions should be imposed at the right moment and those enterprises which operate in strategic sectors ought to evaluate the risk of beginning or carrying on with their investments in that kind of countries devoid of legal certainty.

Fuente: http://nsdsg.blogspot.com.es

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