Bloomberg News

Gamesa Rises Most in Two Weeks as Risk Assets Gain: Madrid Mover

February 01, 2012

Feb. 1 (Bloomberg) -- Gamesa Corp. Tecnologica SA, Europe’s second-biggest wind-turbine maker, rose the most in almost two weeks as investors added bets on riskier assets, rewarding volatile stocks.

Gamesa, based in Zamudio, Spain, climbed 3.3 percent to 3.09 euros in Madrid, outstripping the Spanish benchmark Ibex-35’s 2.2 percent gain. Iberdrola SA, the world’s biggest renewable energy producer, rose 2.2 percent and Madrid-based rival Acciona SA rose 4.1 percent, the biggest increase in two months.

European stocks and government bonds from peripheral euro- region sovereigns advanced today as Greece offered concessions to win a debt-swap deal with lenders. Gamesa’s average volatility over the past 200 days was about 49 compared with 30 for the Ibex, meaning the stock tends to rise or fall more than the benchmark, according to data compiled by Bloomberg.

“The stock is heavily shorted,” said Gerard Reid, a renewable energy analyst at Jefferies International Ltd. in Frankfurt. “If the market is going up, then there’s a bit of short covering and that pushes the stock up even more than the market.”

German bunds fell, with the yield on the 10-year debt rising 6 basis points to 1.844 percent.

Fund’s Stake

Dimensional Fund Advisors LP, the Austin, Texas-based investor with $213.7 billion under management, increased its stake in Gamesa to 7.47 millions shares from 7.31 million shares bringing its stake to 3.02 percent, according to a regulatory filing dated Jan. 30.

Short interest in Gamesa reached 10 percent of its share capital last month, the highest in more than two years, as investors dumped riskier assets on concern European officials were failing to box off the losses from the meltdown of Greece’s public finances.

The extra yield investors demanded to hold 10-year Spanish government bonds jumped 89 basis points in the first part of last month to reach 380 points on Dec. 8 while Gamesa’s shorts peaked on Dec. 12. The spread on Spanish government debt narrowed to 300 basis points today while Gamesa shorts accounted for 6.4 percent of its shares on Jan. 30, the most recent figures available from Data Explorers on Bloomberg.

Short interest in Iberdrola was 1.6 percent of its outstanding share capital on Jan. 30 while Acciona’s shorts were 4.6 percent, according to Data Explorers.

Neither Gamesa, Iberdrola nor Acciona will be affected by Spain’s decision last week to stop granting subsidies for new renewable power generators because they weren’t assuming any additional plants still waiting for approval and the move bolsters aid for their current assets, according to analysts’ notes from Citigroup Inc. and Banesto Bolsa.

--Editors: Alex Devine, Tony Barrett

To contact the reporter on this story: Ben Sills in Madrid at bsills@bloomberg.net.

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.ne.


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