With its eyes focused on political issues, the Argentine stock market operated this Monday with a positive bias, to partly recover from the recent but persistent dismantling of positions due to profit taking.
The leading stock index S&P Merval of the Buenos Aires Stock Exchange rose a strong 3.8%, to 1,576,628 pointsafter losing 8.2% last week, thus accumulating an improvement of 69.6% in pesos and 26.3% in “liqui” dollars so far this year.
Regarding the shares and ADR of Argentine companies operated in dollars on Wall Street, the increases predominated, led by Transportadora Gas del Sur (+6.7%) and Pampa Energy (6%).
Argentine dollar bonds experienced a strong rebound, which averaged 3.8% on Wall Street for Bonares with Argentine law (the benchmark AL30 rose 5.5%), while Globals with foreign law rose 3.3% on average.
Meanwhile, the risk country measured by JP Morgan bank plummeted 94 units for Argentina, in the 1,488 points basics at 5:30 p.m.
“The attention of the week will continue in Congress, waiting for definitions regarding the so-called base law and the fiscal package,” commented the clearing and settlement agent. Bridge. The Senate will begin on Wednesday to discuss the projects promoted by the Government which, if approved with modifications, should return to Deputies to vote on the changes.
Congress could ratify the initiative of obtaining two-thirds in both chambers, inducing the Executive to accept it. If so, investors will be attentive to the fiscal impact of the measure and the evolution of the State’s primary and fiscal balance, Puente explained.
On the other hand, the Chamber of Deputies gave half a sanction to a retirement mobility project that implies an extra payment of 8.1% to retirees as a recomposition, which the Executive said it will veto because it considers that it puts the balance of the pensions at risk. public accounts.
“The market was attentive to both political and economic developments, which led to an increase in uncertainty, reflected in both bond and stock prices and the rise of the dollar. We highlight among the political aspects that were evident the relative ease of the opposition in giving half-sanction in Deputies to a retirement formula that implies greater spending than what the Government promulgated by decree, leading to some uncertainty in the market in relation to whether the The Government will be able to sustain the cash-based fiscal surplus that it has been showing. “President Milei said that he would veto any initiative that compromises the fiscal balance,” he stated. Juan Manuel FrancoChief Economist of the SBS Group.
”The fears and defensive movements of the market would have been fueled by two fronts: the increasing difficulty in approving the reforms in Congress, and red flags in some sensitive macroeconomic variables. In particular, we identify the lower pace of grain liquidation and a stagnation of the expected disinflation path. In favor, the Government can still exhibit its fiscal conduct, an achievement that is under permanent threat from Congress,” he indicated in a report. GMA Capital.
“The change in the macro regime carried out by the new government since December had important implications on the consolidated public debt, a crucial variable due to its impact on the rest of the macroeconomic and financial indicators,” they noted from Consultatio Financial Services.
“Among the main achievements of the new government, the economy shows a slowdown in the monthly rate of inflation, along with a notable recomposition of reserves in the BCRA coffers. But doubts persist on other fronts, such as the reactivation of the level of activity or the sustainability of the fiscal surplus achieved. As if that were not enough, behind all these issues lies a key indicator: the population’s trust in the Government’s management. On the eve of the first six months of Libertad Avanza’s mandate, it seems correct to make an evaluation of the main macroeconomic variables to understand the current context and be able to make projections for the future,” detailed a report from TSA Stock Market.
“At the local level we will know May inflation on Thursday, it was 289.4% year-on-year during April. In addition, the focus will continue in the Senate where on Wednesday the Bases Law and the fiscal package will be voted on,” the analysts from Balanz Capital.
