Qwee

All, this problem is based on data gathered on Datastream. These data provide information for the following time frame: from 01/01/1990 to 31/12/2014. The entire project is saved on the excel file named Group 3.

1.   For this question we used Iberdrola’s adjusted stock prices. Iberdrola quotations start in 1989 date of the company’s IPO. Nowadays, these stocks are still quoted and traded on Bilbao and Madrid stock exchanges. For the rest of this paper we only based our research on the information available on Madrid stock exchange. We started to with a comparison between the quarterly adjusted stock price and the company’s market capitalization.

[pic 1]

Figure 1: Capitalization and quarterly Adjusted prices

We immediately notice a high correlation between the market capitalization and the adjusted prices.

Concerning the market index we choose to use the IBEX35. This index is built with 35 companies each one of them are independently weighted according to their own capitalization. Iberdola represents 10% of this index so we can expect some similarities between both.

[pic 2]

Figure 2:  Ibex35 index and quarterly adjusted prices

We observe that the index and the adjusted prices are quite stable by the beginning of the 90s. Since 1995 until now we can observe a higher volatility. Then around 1998 the spread between the index and the adjusted prices increased until 2003. Other companies from other sectors such as the construction probably influenced the index. Since then they seem to be influenced by the same events and the y same response to them.

2. We listed all the companies dead or alive from the electricity sector. We named this list L#PM15Group3. This list includes the yearly net tangible assets of 7 companies. These companies and concurrent are

• Energias
• EDP Renovaveis
• Red electrica
• Endesa
• Elecnor
• Saeta Yield

Unfortunately we did not have all the information needed to compare all the different companies. This is the reason why we built a comparison between Iberdrola and Endesa.

[pic 3]

Figure 3: Comparison between Iberdrola and Endesa

From 1990 until 2006 we observe a similar level of net tangible assets in both companies. Since 2006  the spread between the Iberdrola and Endesa continue to increases. Even after 2008  the net tangible assets continue to grow in both firms. Both levels were rising at a different speed but since 2012 the level of Endesa’s net tangible assets is dramatically falling. One explanation could be that Iberdrola invested in Scotland, USA, Brazil and Bolivia.