Today, Banco Santander shares tumbled as Spain announced its first bailout of one of its local bank. This shows that the housing market is still weak in Spain.
February, Spanish banks had to lower their housing loans assets by 20% due to the weak housing market. Spain unemployment continues to worsen as the country is expected to contract by almost 1%.
However, Banco Santander has been oversold. Santander’s Spanish operations amount to about 30% of the company’s revenue. The company operates the 3rd largest bank in the UK, and it is one of the largest diversified banks in the world. 30% of its operation is based in Brazil and Latin America, another 30% in UK and the rest of Europe, and the remaining 10% is spread across the US and Asia.
This bank is fully diversified. It is enjoying the huge growth rates in the emerging markets. The recent Spanish news is a good chance to enter STD at a cheaper price.
This is the daily chart. STD has gone up to $17 and now it is at $13.38. I have a mid term price target at $15.60 and a long term price target of $20.
The short term trading target is a mini break out to $14.10.
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