The money, in the hands of businessmen and less of the State

In recent weeks, we have discussed in the newspaper the advisability of publish the rumor that the government is going to limit the profits and dividends of companies, essentially electricity and oil.

No matter how many barbarian tribes there are in this misgovernment, more prepared to celebrate carnivals than to manage crises, I think there is a forcefulness of arguments that make it untenable that the idea was simply outlined. The logic is that would create legal uncertainty whereby companies would immediately lose investors and their access to financing in the markets would become more expensive.

Although what seems most obvious to me is that, if at any time we want to accelerate entrepreneurship in this country, it is infinitely better that the money is in the hands of businessmen and citizens, and at least the State. That in this world the public treasury is the one who manages most of our wealth is like what Unamuno said about what Spain thought of technological development: “Let them invent outside, and we will give our opinion.”

Trying to put a tax on the profits and dividends of the Spanish listed companies is ignoring that the majority of the shareholders of Spanish companies are foreign institutional investors to whom the commitment of our listed companies to Spanishness, in the best of cases, brings them to the hoof.

An investment fund in Oslo or a pension plan in Chicago Iberdrola and Repsol cards would change by those of Enel and Total almost immediately if an extraordinary income tax were produced that would alter their remuneration policy. The Government would destroy with a stroke of the pen that the gentlemen who make the decisions from Oslo and Chicago think that Iberdrola offers more growth than Enel and Repsol is bought cheaper than Total in the last semester.

But the economic atrocity of limiting companies’ profits above what happens to their European counterparts is that would preclude the expected return of the managers admissions to the Spanish market, which is a clear value and in recent years it has been heavily penalized against growth markets.

It is nothing new to review the profit multiplier paid by the Ibex and verify that buy much cheaper than the rest of the European stock markets, even if there is a downward revision – which is going to take place – of profit expectations after the invasion of Ukraine and chronic inflation.

It is something that will continue to happen. But that differential can continue to narrow to the extent that the return of international managers to the Spanish stock market is not truncated. If today you ask one of these funds or plans what their position is in Spain compared to a few years ago, they will tell you that it is around 20% lower.

*Joaquín Gómez is deputy director of ‘elEconomista’.