How about the Stock Exchange of Madrid!

On a humid cool day up north, let me tell you another story of my beloved Madrid. This is not something you go just for tourism but it can be visited and well worth the educational trip.

I like to tell you about the Stock Exchange or Bolsa of Madrid. It is a building that when young I do not think about it, but as I grew older and invested, became very much interested in visiting. I remember in my late teens my school in NJ took me to visit the Wall Street stock exchange and it hit me. Therefore, later on my visits to Madrid, decided to pay a brief visit without any guides just walk around it. It has a nice history to it.

The Madrid Stock Exchange (Bolsa de Madrid) is the main stock market in Spain. It is based in the Palacio de la Bolsa. Its reference index is the General index of the Madrid Stock Exchange (IGBM). or Index General de la Bolsa de Madrid.

Madrid

A bit of history I like

13C: The Juros (promise debt to pay) were paper emissions of the State by which a debt was guaranteed, being these the first form of public debt. It was in Castilla where the first titles of values that were created were the so-called Royal Juros, a loan contracted by the Kings that granted to different personalities.

14C: The recruitment markets, the first created by king Jaime I of Aragon in Palma de Mallorca, in 1246, although it was not built until 1409. We still have some of these buildings such as the Lonja de Palma de Mallorca, Zaragoza, Valencia and Barcelona, not forgetting Casa Lonja in Sevilla, dependent on the Casa de Contratacion de las Indias (hiring house of the Indies) since 1503, the headquarters of the General Archive of the Indies (new world), which collects company documents related to the commercial monopoly that it maintained with the Hispanic possessions in America for more than two centuries. Since the 16C there were exchange brokers, Lonja, Royal vouchers (Vales Reales) or customs.

In the midst of the War of Independence Joseph Bonaparte was appointed King of Spain in 1808 by his brother Napoleon Ier. Joseph I Bonaparte in 1809  made the decision to establish the first stock exchange in Madrid, however, he did not get to started it.

In 1831, reigning king Fernando VII, passed the law that gave origin definitively to the Bolsa de Madrid: The Law of Creation and Organization of the Bolsa de Madrid. The stock exchange had been defined in article 64 of the 1829 trade code as:  “A place of meeting of merchants and mediators where the operations of the hiring of movable assets are conformed or fulfilled “.  It was promoted with the law the creation of a market similar to those existing in other countries, such as that of Paris created in (1734), London in (1804) or New York in (1817). In 1854 begins the publication of the Bulletin of contributions and during the Liberal period  the peseta (Spanish currency) will be born.

Madrid

On October 20, 1831, the institution of the Madrid Stock Exchange inaugurates its first session at the consulate of the Plaza del Ángel. The Bilbao Stock Exchange was inaugurated in 1890, the Barcelona Stock Exchange in 1915 and in 1930 the Valencia Stock Exchange was created. The hiring system is made in a lively voice,or a system of roll calling. In 1856 the Bank of Spain was born and in 1868, in addition to the Bank of Spain, nine banks or credit companies were listed in it, 17 railway companies and 34 mining and utility companies.

Madrid

In 1898 there is a great crisis and the trading decline as a result of the loss of Cuba, Puerto Rico and the Philippines, suffering the prices of stocks a fall of 20%. In 1900, there is a reborn strongly due to the repatriated capitals of Cuba and the Philippines. While in 1900,  61 companies were quoted in the first 20 years the number of companies quoted was multiplied up to 121 with special growth in electrical companies, some bank and industrial companies.

During ,WWI, the Madrid Stock Exchange remains open and the increase in trading and expansion continues. The beginning of the Spanish Civil War obliges to suspend all its activity until March 5, 1940, in which it opens its doors again. It was in December of that same year that the General index of the Madrid Stock Exchange (IGBM) was born. With base 100, it was set to zero every year. Of the 28 companies that formed part of the long index created with base 100 on December 31, 1940, only three survivors remain, excluding the companies integrated or merged in new groups: Banco Espanol de Credito (up to 2014 Banesto), Inmobilaria Metropolitana (real estate, its current name is Metrovacesa) and Telefónica.

In 1989 begins to operate the continuous market for stocks (CATS: Computer assisted trading System). In 1991 the figure of the investor Protector of the Madrid Stock Exchange will be created and the electronic system of fixed income trading will be launched. In 1992 the SCLV is launched, which is a new clearing and compensation service, which initiates the new liquidity system by annotation in account and in 1993 and all fixed income emissions become contracted by an electronic system. In 1995 CATS is replaced by the system of interconnection Spanish Stock Exchange (SIBE). Since January 1, 1999 the stock trading is carried out exclusively in euros and that same year the Latin American securities market will be launched in euros under the name of Latibex.

In 2002 the Madrid Stock Exchange will be integrated into the Spanish stock exchanges and markets group. The BME owns 100% of all Spanish stock exchanges, of the private and stock market of fixed income, of the platform of procurement of public debt (SENAF), of the derivative market (MEFF), as well as of the central depositary and the Chamber of Creation and Compensation of Values called Iberclear. On July 14, 2006, BME himself went on the market with a capitalization close to 25 billion euros.

A bit of a trajectory indeed for the Bolsa de Madrid.

Between 1831 and 1850 the Bolsa had six different venues. In the Plaza del Ángel, corner with Calle Carretas was for a year. In 1832 it moved very close, to a narrow courtyard of the Philippine Company House on Calle Carretas. In 1841 it passed to the cloister of the Convent of San Martín and in 1846 to the Church of the Convent of the nuns Bernardas  in Calle de  Alcalá, corner with Calle Peligros. In 1847 he moved to the Monastery de Los Basilios, in Calle Desengaño. In 1850 it passed, to the old customs building, in the Plazuela de la Leña. There, during the First republic a new building was built. Meanwhile, the Stock Exchange sessions were held at the theater and circus Paul, in the centric Calle del Barquillo. In July 1878 the construction of the present Palace of the Stock Exchange was approved in the Plaza de la Lealtad. The works began in January 1886; It was inaugurated on May 7, 1893 by the Regent Maria Cristina.

Some webpages to help your plan your trip here are

Tourist office of Madrid on the Bolsa

Private trade center firm with lots of history on the Stock Exchange or Bolsa in Spanish: https://esbolsa.com/blog/general/bolsa-de-madrid/

Official Bolsa or Stock Exchange of Madrid visiting rules

Hope you enjoy it, it is a nice place to do something different in Madrid or one old VT used to say off the beaten path!!

And remember, happy travels, good health, and many cheers to all!!!

 

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