Currently, the three Spanish multinationals obtain more than 5% of their income in the Latin American country. How it impacts your immediate plans
The result of the primary elections that decreed the defeat of President Mauricio Macri and the victory of candidate Alberto Fernández, was a brutal blow to the markets.
The first symptom is observed in the behavior of the bonds that are listed on European markets, which collapse, soaring their profitability.
Although Spanish companies exposed to Argentina, especially Telefónica, BBVA and Santander, what they may be more worried about is the foreseeable impact of the electoral result on the Argentine peso.
Currently, the three Spanish multinationals obtain more than 5% of their income in the Latin American country.
Santander just weeks ago ratified its commitment to Argentina with Mauricio Macri himself inaugurating his new building of 42,000 square meters in the country and in which 2,000 employees will work.
Currently, Santander has 9,000 employees, 3.7 million users and is among the top positions in the country's credit volume.
BBVA, which a few days ago sold its subsidiary in Paraguay, has 6,300 employees in Argentina and already in 2018 had to face an accounting impact of 266 million euros for inflation in the country. With a view to this year, the entity expected a contraction of the activity of 1% in Argentina, after the fall of 2.4% in 2018, to then recover around 2.5% in 2020.
As for Telefónica, UBS analysts recommended a few days ago the divestment in Argentina (and throughout Latin America, with the exception of Brazil), which, in the opinion of the bank, would not only help you reduce your debt, but also to reduce currency risk.
According to the forecasts of the Argentine division of the Brazilian investment bank BTG Pactual, the Argentine currency could fall by 25% in today's session. It is an immediate impact that Spanish companies will suffer in their income. And it is especially harmful because of the rapidity with which it will foreseeably occur, since it prevents any room for maneuver.
The big multinationals are not the only Spanish companies with interests in Argentina. Other companies with investments in the country are Mapfre, Indra, Gestamp, Dia or Codere. These last two stand out above all, with 13% and 23% of their annual income obtained in that country.