There is room for the optimism in the stock market
Redacción Mapfre
The stock market is trading near all-time highs after years of robust growth, yet there’s still room for continued optimism regarding the future performance of indices such as the Ibex, according to Javier de Berenguer, fund selector and financial markets analyst at Mapfre Inversión.
Following years of trading below its book value, the recent market rally has eliminated the undervaluation of the Spanish stock market. However, the index still has upward momentum driven by stronger earnings projections for most companies and attractive dividend yields.
The finance sector stands out as a key driver for indices, benefiting from a more diversified business model featuring growth in fee-based income and bancassurance revenues, alongside reduced reliance on net interest margins. The sector maintains a substantial capital buffer, well above regulatory requirements. “Ultimately, if you have higher revenues and a solid capital cushion, virtually all your earnings can be returned to shareholders, whether through dividends or buybacks,” notes De Berenguer.
This optimism extends beyond individual sectors and the Spanish economy. “We anticipate stronger economic growth in Germany than what we've seen in recent years,” explains Javier de Berenguer. “The country has an ace up its sleeve that other Western economies lack: room to increase public spending. The question is what the economic multiplier effect of this spending will be,” he adds.
On the downside, risks include the trade war, which hurts Germany due to U.S. tariffs that raise export costs, and euro strength against the dollar, which makes imports cheaper. Nevertheless, we should be looking at growth around 1% in 2026.
In this environment, Mapfre Inversión recommends a defensive posture. “We believe that diversification in portfolio construction, aligned with time horizons and risk profiles, matters most, not necessarily picking the right individual investments,” De Berenguer cautions. In a highly dispersed market environment, you need to remain tactically flexible, because volatility creates entry opportunities into specific assets.
