The S&P Merval rises again this Wednesday, May 8, after its previous decline due to expected profit taking, encouraged by renewed purchases by institutional investors of securities with good liquidity.
Recent positive economic indicators for the domestic economy breathe life into the market and drive record values in the stock market, at a time when all eyes are on Congress and the treatment of the so-called ‘Bases Law’.
The S&P Merval index of Buenos Aires improved 1.5%, to 1,485,633.12 units at 1405 GMT, after losing 2.15% on Tuesday after marking a record level of 1,505,718.34 points.
“The Merval continues to be attractive as it has room to continue rising, especially thanks to energy and banking stocks”said one stock trader.
Last week the Chamber of Deputies approved the “Bases Law” promoted by libertarian President Javier Milei to deregulate the economy and it is now being discussed in committee in the Senate for its subsequent vote scheduled for next week.
The main Argentine stock index ended lower on Tuesday, in the opposite direction to sovereign debt in hard currency. The S&P Merval fell 0.6% in dollars to end at US$1,336. The fall of the leading panel in pesos was much greater, around -2.2%, but the implicit CCL of the ADRs cut 1.6% and moderated the losses.
On the local stock market, shares traded mostly negative, with significant reds in IRSA (-5.8%), BBAR (-5.7%) and SUPV (-5.3%). On the other hand, VALO (+8.8%), TECO2 (+4.2%) and TRAN (+3.3%) achieved positive variations. On Wall Street, ADRs operated mixed with strong increases in TEO (+5.5 %), BIOX (+4.1%) and MELI (+2.1%), while the losses were led by SUPV (-3.7%), DESP (-3.3%) and BBAR (- 3.2%).
Today the resolution that would allow the recomposition of the payment chain of the Wholesale Electricity Market was published in the Official Gazette. Let us remember that CAMMESA owes several companies in the energy sector for transactions from December, January and February.
Once the amounts of the debts have been determined, the government’s proposal consists of payment by delivering AE38 Bonds for December and January transactions. Meanwhile, the February transaction will be paid in cash with funds available in CAMMESA’s bank accounts.
Although this seems to be the beginning of the end of one of the problems that generated the most noise among energy companies, it should be mentioned that, At the close of Tuesday, the AE38 was trading at 52.7% parity, with which companies would be assuming a loss of practically half of the transactions in December and January.
