The Argentine stocks and bonds suffered a widespread collapse this Tuesday amid bad weather in global markets and both economic and political uncertainty at the local level. ADRs fell up to 8%, the S&P Merval measured in dollars fell to its lowest level since April and the country risk rose to its highest since March.
At the local level, the treatment of the Bases Law in the Senate and the expiration of the currency “swap” with China put a blanket of caution among investors. The investment advisor, Gaston Lentinihe assured Ambit that, “all the markets in the world started red”.
“The victory of the leftist candidate in Mexico and the electoral results in India are the context,” Lentini said. Likewise, the strategist pointed out that we must remember that the Buenos Aires stock market was the one that rose the most in the world for two years in a row, “so this decline is a healthy part of the market and for many it is what they were waiting for to be able to take new positions.
The elements that generate market noise
Another market source agreed with lentini and slipped that this fall in national assets “It comes from the rumors of the non-renewal of the swap with China. In addition, the votes for the BaseS Law are counted by hand, so any false step could cause it to not be approved.“.
In that sense, Argentina would have to put something like US$5,000 million to pay off the debt with Beijing. “What could save us is to renew the swap or that he International Monetary Fund (IMF) lend us those US$15 billion that are being talked about,” the source added.
“And the news that the basic law would not come out until July and that we have to pay the Chinese US$5 billion (of the little we have) delaying any desire to get out of the trap soonseem to set the mood of the day in the country“said the source.
Argentine assets in decline
The index S&P Merval gave up a 4.7% in pesos to 1,581,164 units, after accumulating a strong improvement in 24.8% during May. Likewise, measured in dollars the drop is 5.7%.
“Journalistic rumors that the government might have to repay the active tranche of the Chinese swap with reserves would not have been well received by Argentine assets,” he said. Personal Portfolio Investments in a report.
“Not ‘rolling over’ this commitment implies that US$4.9 billion are paid between June and July. Considering that US$2.6 billion must be paid in July between principal and interest of Globales and Bonares, US$7.5 billion should be disbursed in these next two months if an agreement is not reached for the Chinese swap“said the brokerage company.
The energy and financial sectors lead the losses of the Buenos Aires stock market. The leading panel stocks that top the red list are: Transportadora de Gas del Norte (-7.3%), YPF (-7%), Grupo Supervielle (-6.7%), BBVA (-6.5%) and Pampa Energía (-5.8%).
ADRs
Meanwhile, among the Argentine stocks listed on Wall Street, collapses of more than 8% in Supervielle and YPF.
Dollar bonds
Bonds denominated in hard currency followed the trend of equity assets. In this context, they fell to 4.8% after moderating the fall that in the first operations was more than -6%.
The declines were led by the longest titles; the GD41 and the AL41. In that sense, risk country 74 shoots units, or 5.1%, to 1,486 basic pointsas measured by JP Morgan.
