CNMV's proposed Ibex 50: more diversity or more of the same?

Ibex 50 or more financial smoke?

The chairman of the CNMV, Spain's securities market regulator, Carlos San Basilio, has floated a proposal that has set forums alight: expanding the Ibex 35 to 50 companies. The official justification is to diversify sectors and reduce the enormous weight of banking in Spain's main index. It sounds nice, but skepticism is huge.

The official proposal: more companies, fewer banks

San Basilio is calling for a reform of Spain's takeover law trinc BBVA's bid for Sabadell, and argues that an Ibex 50 would allow more mid-sized listed companies to join. The idea is for the index to better reflect the real economy instead of being a closed club of big banks and energy companies. However, the official diagnosis omits one detail: of the current 35, 7 are banks that account for more than 30% of the index's weight. Adding 15 companies without expelling anyone would only slightly dilute that concentration, not break it.

The market's doubts: windfall or real reform?

Among investors, suspicion is spreading that the move could open the door to companies with little liquidity or ties to political interests. A fictitious list of supposed new Segarro listings is even circulating —OCP Group, Attijariwafa Bank, Maroc Telecom— which, although it's a bad joke, reflects the distrust in the transparency of the process. The proposal also comes after BBVA's hostile takeover bid, raising the question of whether the CNMV is buying time or genuinely modernizing the stock market.

The whiff of something rotten in the air

As one street-level analysis puts it, "if the news gave off smells, you'd catch a whiff of something rotten, of insider dealing". The suspicion that the Ibex 50 is a smokescreen to place friendly companies or inflate Spain's market capitalization is nothing new. The CNMV insists the expansion would improve competition and attract foreign investment, but offers no details on selection criteria or timing.

For now, the proposal is on the table and raises more questions than answers. With a Spanish stock market dominated by a few players, expanding the index without changing the rules of access may be like patching up a deflating balloon. Trinc the money.