The “tail wind” blowing in the region pushed up Argentine assets and favors the management of the economic team

REUTERS/Agustin Marcarian

Although the measures expected by investors have not yet arrived, the tailwind that blows in the region continues to help the management of Sergio Massa. The resurrection of the bonds continued for the third consecutive round and the country risk had a significant fall of 49 units (-2%) to 2,347 basic points. In three wheels the country risk yielded 111 units (-4.5%). The foreign-law debt bond that rose the most was the Global 2035 (+5%).

“Since Massa took office, there is a favorable wind in the entire region, from which Chile is outside, for obvious reasons. This wind blows in Brazil, in Colombia, in Mexico, in Peru and also in Argentina where the phenomenon reaches stocks as well as bonds. The new Minister of Economy took over with luck; the tailwind stays. The problem is that in this period they have not made concrete progress, particularly on the most burning issue of international reserves, which can make the country go to the IMF to use the fund that was created for the pandemic that could give us another USD 1,300. millions. We are looking for more debt to avoid what the economy is crying out for, which is an honest exchange rate. The field claims it because the costs do not close it; we see the problem caused by the increase in urea worldwide,” said analyst Leonardo Chialva.

“A fact that shows the exchange delay is that imports of whiskey doubled compared to 2019 because it is a drink that can be stored and importers took advantage of the official exchange rate. This is unsustainable as are the Central Bank’s liabilities at this level of interest rates. There is a combination of factors that have not been resolved beyond the promise of fiscal adjustment. So we continue to navigate stormy waters, but with a regional context that continues to help us since July 21 last. It seems that there is little progress with USD 1,000 million net in the Central Bank and a crushing of imports that we feel in the industrial activity data that in July fell more than 3%. In short, it is a recessive adjustment that is being considered. Because by not wanting to devalue imports are ironed in a discretionary manner and there will be companies that will not have supplies or products to sell or manufacture. And here the negative part begins”, added Chialva.

Among the bonds in pesos the most outstanding were the duals that increased 0.50%. These titles released just over a week ago are adjusted for dollar value (pegged to the dollar) or by the CER, the index that best suits the investor at maturity. The one that expires next July accumulates increases of 5% in 10 days.

Stocks also had this tailwind. The S&P Merval, the leading stock index, rose 2.37% in pesos and 4.3% in dollars. The curious thing is that the leaders rose 14% in dollars in the year and of that total, 12% achieved it in August.

The amount of business was coupled to this optimism and no less than $2,855 million were operated. The most benefited papers were Northern Gas Carrier (+5.64%) and BBVA (+5.5%).

The ADR’s -certificates of holdings of shares that are listed on the New York Stock Exchanges- operated scarcely $4,698 million because North American investors are cautious, unlike what is happening in Latin America.

The financial dollars entered pause by the negotiations of Massa with the field. In this way, the bonds used to operate them had strong rises. AL30D increased 3.81% and GD30, 3.23%. The result of this move was a drop in the MEP dollar of $1.55 (-0.5%) to $286.60. Cash with liquidation lost no less than $5.52% (-1.8%) to $293.48. Two wheels ago it was over $300.

The wholesale dollar rose 20 cents to $137.15.. The Central Bank was able to buy USD 6 million, but reserves fell USD 19 million to 37,002 million due to the strength of the dollar against the six main world currencies. The euro fell below the dollar at USD 0.9970 and the yuan also fell.

Some profit-taking in bonds is expected for today, although there are funds from abroad that continue to see opportunity prices in the region, particularly in Brazil.


Markets: dollar bonds gain another 2% and country risk is the lowest in two months
The debt tied to the official dollar is close to USD 30,000 million
Dollar today: the free price fell to $295
Reserves: the Central Bank reached ten consecutive days of dollar purchases

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