A steep decline in Astroc Mediterraneo's share price last week has added fuel to concerns that Spain's 10-year real estate boom may be coming to an end. Astroc fell 43% last Wednesday, wiping EUR 2.3 bn from its market value, in the wake of disappointed with the company's figures for 2006.
A steep decline in Astroc Mediterraneo's share price last week has added fuel to concerns that Spain's 10-year real estate boom may be coming to an end. Astroc fell 43% last Wednesday, wiping EUR 2.3 bn from its market value, in the wake of disappointed with the company's figures for 2006.
The shares recovered 6.7% on Thursday after the company, headed by Enrique Bañuelos, denied that its core shareholders Nozar and Pontegadea Inversiones, the investment vehicle of Amancio Ortega, were going to sell shares. In a statement, Banuelos also said 'there is no conflict whatsoever within the company's management.'
The drop in Astroc's shares price hit other Spanish real estate groups, such as Fadesa, Inmocaral, Colonial, Metrovacesa and Urbis, and analysts are now closely monitoring Spain's major property groups. But not everyone is convinced that Spain's real estate boom is ending. 'What happened to Astroc is normal and follows speculation that has now been corrected. The sector is in general doing good,' Alberto Espelosín, manager of Spanish bank Ibercaja, told daily newspaper Cinco Dias.
