Spain's exchange traded fund (
) shot up 11% last week week despite rumors that it had asked the
European Union for economic aid. Could this reflect a fundamental
shift in the Spain ETF or was it just a good run?
Paul Day of Reuters reports
that Spain's official response to the rumors of a bailout request
is that they are false. "This is a lie. There's no rescue. There's
nothing asked for, nor will there be. I don't know where they got
this from," said a spokesperson for Spain's economy ministry.
The rumors started with a report by FT Deutschland, which
claimed that the E.U. was preparing to activate an aid package in
case Spain requested one. [
Euro ETFs and Jim Rogers: Time to Buy?
A European Commission spokesperson commented that there was no
official aid request from Spain at the moment. "We are not
preparing anything- it is speculation," said Amadeu Altafaj.
Other reports gave more confidence in Spain. On Thursday, Spain
saw solid demand for its new 3-year benchmark bond, giving
confidence to July's redemption of $19.6 billion. The 10-year
Spanish/German government bond yield narrowed by two basis points,
reflecting rising confidence in Spain's economy. [
Euro ETFs in the Bargain Basement.
But few think the troubles are over.
The World Bank still sees Spain's situation as very serious,
reports the Tehran Times
. One of the biggest issues is Spain's massive unemployment, which
at nearly 20%, is the highest in the eurozone. On a positive note,
the World Bank does think Spain's fiscal austerity measures - to
slash the deficit from 11.2% to 3% of GDP by 2013 - is a move in
the right direction. [
Europe's Fiscal Mess.
Wherever Spain goes from here, the ETF clearly has a long march
ahead before it touches the 200-day moving average. At the moment,
it's about 18% below the key mark.
For more stories on Spain, visit our
iShares MSCI Spain Index (NYSEArca:
Sumin Kim contributed to this article.