BBVA, Mapre Lead Spain Sell-Off on Emerging Markets

Spanish banks including Banco Bilbao Vizcaya Argentaria SA, the country’s second-biggest lender, and insurer Mapfre SA led declines on Madrid’s IBEX 35 Index on concern that a slide in currencies in emerging markets from Argentina to Turkey may hurt earnings.

BBVA, which is largest shareholder in Turkiye Garanti Bankasi AS, Turkey’s biggest listed lender, and owns a bank in Argentina, fell as much as 6 percent to 8.77 euros, the steepest decline in 10 months. Mapfre, which does business across Latin America and in Turkey, dropped 3.7 percent. Banco Santander SA, the biggest Spanish bank and which earns about a quarter of profit from Brazil, fell 1.7 percent to 6.46 euros. The IBEX 35 slid 2.2 percent.

“There is going to be a lot of focus on Argentina and Turkey where the potential risks seem highest,” Benjie Creelan-Sandford, an analyst at Macquarie Bank Ltd. in London, said in a phone interview today. “The general economic situation has been worsening in Brazil and that’s a special concern for Santander if there is more contagion there from Argentina.”

Spanish financial firms and companies from Telefonica SA, the biggest phone company, and security services firm Prosegur Cia de Seguridad SA, have relied on emerging markets to shield their earnings against an economic slump in Spain. The Federal Reserve’s tapering of monetary stimulus, compounded by growing political and financial instability, has triggered the biggest sell-off in emerging-market currencies in five years.

The Argentine peso is the worst-performing currency in the world against the euro this year, with losses of about 17 percent, while the Turkish lira is the second-worst after falling 7.1 percent.

Prosegur, which gets 12 percent of revenue from Argentina, according to data compiled by Bloomberg based on 2012 earnings, fell 7.6 percent, the biggest drop in a year. Telefonica, which relies on Latin America for about half its revenue, fell 4.6 percent.

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