hedging instruments and offer new opportunities when
implementing strategies and trading.
The Spanish stock market - world leader in channelling
new investment flows
The Spanish stock market has been considerably buoyed
by capital increases. Along with London, the Spanish
market leads the way in Europe in financing companies
via capital increases. BME received an avalanche of new
issues, totalling around 29 billion euros, and the Spanish
market now ranks second in Europe and sixth worldwide
in terms of new investment flows channelled.
Dividend maintained
BME has maintained a very solid dividend payout
and this year will submit to the General Shareholders’
Meeting the distribution of the same level of shareholder
remuneration as in 2011, the highest in the market oper-
ators sector.
This shareholder remuneration policy is based on a
number of factors, including operating gearing. In
other words, revenues not linked to trading volumes
amply cover the company’s costs, an extremely favour-
able situation. The coverage ratio was 118% at year end,
an improvement of six points compared with the ratio
of 112% at the end of 2011, and remains comfortably
higher than the sector average.
Towards a funding model based on more capital and
less debt
The volume of Debt in the system must be reduced, and
the crisis has demonstrated that an excessive reliance on
credit does not support growth. Measures are needed to
construct a financing model that promotes a lower level
of leverage.
Finding ways of stimulating job creation has become a
priority. New funding methods that complement tradi-
tional bank credit must be found to finance small- and
medium-sized enterprises, which are the main creators
of employment around the world. Regulated markets
stand out as offering one of the most compelling alter-
natives to achieve this objective.
The MAB requires tax incentives to attract investors.
Small- and medium-sized enterprises are smaller and
have lower levels of liquidity than other listed corpora-
tions, so boosting the viability of funding such entities
is essential. The creation of investment funds or vehi-
cles specialising in this type of enterprise would also
contribute to promoting investments.
Initiatives in this sphere include the creation of an Alter-
native Fixed Income Market (MARF) for SMEs, reflecting
the government’s desire to promote new funding
methods that complement traditional bank credit.
Small- and medium-sized companies in Spain are too
small. A major step in making improvements to these
enterprises’ financing structure is to restructure the size
of these businesses.
Stock markets have a crucial role to play in weathering
the crisis. Therefore, it could be counterproductive to
impede this mechanism for cleaning up and bolstering
economies. The creation of new taxes or restrictions on
trades could impact negatively on the cost of capital,
precisely at a time when this capital is needed by
companies to finance themselves. Equally, it could even
discourage investors from investing in share capital.
Indicators compare favourably with those of rivals
The key management performance indicators compare
favourably with the sector average. The efficiency ratio was
33.4% in 2012, 13 points better than the sector average.
Full-year ROE was 32%, over 18 points higher than the
sector average.
Technological diversification and innovation
This year saw BME successfully revamp its electronic
trading platform (SIBE) which unifies into a single system
the trading of shares, ETFs, warrants and other invest-
ment products. The new SIBE multiplies trading capacity
and offers the market considerable growth potential
sufficient to meet its current and future needs in terms of
both the number of trades and trading volume.
In the Fixed Income sphere, the strong performance of
SEND demonstrates BME’s far-sightedness two years
ago in creating this Fixed Income platform for private
investors with the aim of improving transparency and
liquidity in the Spanish Corporate Debt market. This
year Public Debt will also be traded on this platform.
Following the completion of the process to consolidate
all information sources during 2012, all BME Market
Data users can, from this year on, receive all the infor-
mation generated by the BME Group’s systems and
markets in real time, through a single connection and
in the same format.
In order to meet investors’ needs and bring the way in
which the Spanish derivatives market operates into line
with the rest of the world, this year the hours for trading
IBEX 35-linked futures on the MEFF were extended.
Futures contracts on the Spanish 10-year notional bond
were also launched onMEFF in 2012, which can be used as
Letter from the Chairman
Report 2012
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