With the clock approaching midnight on December 31, the date on which the transition period of the Brexi, the leaders of the European Union (EU) have confirmed this Thursday that “the necessary progress has not been made” to avoid a chaotic exit of the United Kingdom from the internal market and the customs union. Rather, it is on the way to closing without an agreement.
Specifically, the message that comes out of the last summit is that the EU wants to continue negotiating and would prefer that there be an agreement before the end of this month of October due to the deadlines required by the bureaucracy. However, European leaders have already asked Brussels to prepare for the worst-case scenario as well.
The investment manager of Metagestión, Alfonso Batalla, has explained in conversations with OKDIARIO that “although we must be cautious with the evolution of the negotiations, it is beginning to be said that Brexit will end without an agreement. A scenario that would fully affect Spain, since the United Kingdom is the fourth largest buyer of Spanish goods and in the event that the exit occurs in a chaotic way, the pound would deteriorate, unemployment would skyrocket and exports would sink due to the increase in rates ”.
Ferrovial: the most punished
A scenario, which according to Batalla, “will hit companies with high exposure in the British country, causing a collapse in prices in the face of geopolitical tensions due to the fall in income, to which must be added the impact of the crisis of the coronavirus. The most affected: Ferrovial, IAG, Sabadell, Telefónica, Iberdrola and Santander».
«If no agreement is reached, the company most affected will be Ferrovial due to its high exposure in England, since it concentrates 45% of its sales in the country. Followed by the company of Ignacio Madridejos Fernandez, is the airline group IAG, whose sales exceed 30% in Great Britain, “explains Batalla.
In the case of the airline holding company, the Metagestión investment manager explains that “if you add the coronavirus crisis to the economic difficulty within the British country due to Brexit, we will see that the dynamics in the company’s sales are going to be very depressed and deteriorated causing a collapse of the income never seen ».
Johnson’s hit to the bench
Among the sectors most affected, banking stands out: «The subsidiary of the Bank Sabadell, whose business in the United Kingdom is already very affected, could suffer a collapse of its profits without ruling out bankruptcy due to a worsening of the economy derived from the impact of the coronavirus crisis and a chaotic Brexit.
The British subsidiary of Banco Sabadell, TSB, has already been severely affected by the pandemic and plans to close an additional 164 branches in the UK in 2021, affecting 900 jobs. TSB currently has 475 offices, a sum that comes after the 164 closings in 2021, and the 21 offices that were already scheduled to close before the end of the year.
Batalla explains that “the business of Bank Santander In the United Kingdom it will also have some impact on its profit and loss account in the event that Brexit ends without an agreement, but Ana Botín’s entity has prepared a contingency plan with staff adjustments or temporary division closures to deal with leaving London. ‘
«If to this we add the situation of Spain with a government social-communist that does not provide any type of legal certainty, that is skipping all constitutional and European rules of the game, we could see a penalty in the prices due to the distrust of investors ”, and alerts of an avalanche of sales that destabilizes the prices of the actions.
The big winners
Meanwhile, the Metagestión investment manager explained that “one of the great beneficiaries, whether there is an agreement or not, is Cellnex Telecom, because your business in the country is essential, despite its great exposure and the negative impact due to currency fluctuation. The company of Tobías Martínez Gimeno controls a large part of the country’s infrastructure after the acquisition of towers.
“Although those Spanish companies that also have a certain exposure to England in the industrial part could be positively affected, as is the case of Talgo. The Government of Boris Johnson plans to invest 5,000 million euros in railway infrastructure, such as high-speed trains, commuter trains or subway remodeling, and the Spanish company is one of the favorites to win the contract, “he concludes.