Key levels that the shares of Iberdrola, Endesa and Naturgy should not lose
The government will limit gas prices, reduce taxes and redirect profits to energy companies as part of a package to lower rising electricity prices, Chief Executive Pedro Sánchez said on Monday.
The President of the Government, Pedro Sánchez, pointed out this Monday in an interview on TVE that it is unacceptable that energy companies are benefiting from high electricity prices and stressed that the profits redirected from public services companies would be used to limit the gas prices and reduce energy costs for consumers. “We are going to withdraw the extraordinary profits of the electricity companies to cover the gas bill and thus also reduce the electricity bill”, defended.
The electrical shall temporarily return the Benefits “extra“What are you getting in the wholesale electricity market (pool) as a consequence of high international gas prices and that, according to government estimates, at current prices will add up to about 2,600 million euros.
This measure, which will apply until March 31, 2022 and whose income will go to reduce the charges that all users pay on their bill electric, is part of the shock plan approved by the Council of Ministers via royal decree-law to cushion the impact on the electricity bill of the high pool prices, which since July it is at all-time highs.
The facilities affected by this average are nuclear, hydraulic and renewable to market (those that do not receive premiums or have participated in auctions), except those with installed capacities of less than 10 megawatts (MW).
The objective is that companies return up to 90% of these extraordinary benefits, suddenly and unexpectedly due to the imbalances in the international gas markets, have explained sources from the Ministry for Technological Transition, who have indicated that the measure will be in force until March of next year, when it is expected that gas prices will begin to fall .
The Government will also limit the rise in the regulated gas rate (TUR, Last Resort Rate) during the next two quarters, although this will mean that a greater deficit will be created in the gas rate. The Executive’s plan is for prices to gradually recover after the two quarters.
The electrics correct with force
So far this week, Endesa shares have fallen 8.95%, Iberdrola 4.50% and Naturgy (Gas Natural) 0.23%. The power companies threatened the Executive yesterday with paralyzing the nuclear power plants and also with a legal battle in the courts.
“The punishment of investors with Endesa arises from the increase in electricity prices, since this increase is not so ‘favorable’ for the large listed companies of the Ibex 35, whose increase exceeds 25% since last June. Given this fact, the situation especially penalizes the electricity company, which also has to go to the wholesale market to obtain electricity, so the price increase conditions the listed company, where they obtain a higher return with “stable” prices, that is, in neither of the two extremes, “says Diego Morín, an analyst at IG.
“The impact is greater on Endesa because it is more dependent on the Spanish market, so this new cut in extraordinary benefits will punish the value, which already leaves more than 7.10% in two days, yielding a critical level such as 20.00 euros, with the next point of arrival around the 18.28 euros “, explains Morín.
Iberdrola succumbs to the downward pressure that began yesterday Tuesday, losing the psychological support of 10.00 euros per share after the decision of the Spanish Government. “From now on, it will be interesting to see the negotiation carried out by investors in the coming weeks, since upon losing the support of 10.00 euros, the next stop (support) of the electricity company shares will be around 9.50 euros “, Add.
For his part, the Investment Strategies analyst, Luis Francisco Ruiz assesses that “Naturgy is stagnant at one step from historical highs. The price stabilizes around the average of 40 sessions within a well-defined range with a ceiling at 22,360 and bottom at 21.27. The bottom is bullish, volatility is below average and trading volume has rebounded in recent weeks. Conditions favor further rises and the recent range eventually breaking to the top. Higher up, key resistance is at the year-on-year high at 23.40 “.