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Signs of Spanish housing bubble

By Mark Mulligan in Madrid

Published: April 24 2007 19:24 | Last updated: April 24 2007 19:24

As investors in the Spanish stock market watched their shares tumble on Tuesday, no one could say they were not warned.

Analysts, commentators and the country’s central bank had been saying for months that, after a three-year rally, shares looked overvalued. Driven by merger activity, excess liquidity and strong corporate results, market capitalisation among the main Ibex 35 groups has climbed to three times book value compared with fair value of 2.7 times, according to Bedlam Asset Management in London.

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