The index S&P Merval of the Buenos Aires Stock Exchange negotiates with a decrease of 3%, to 1,530,000 points at 11:15 a.m. The stock market resumed activity after four days without business due to the domestic long weekend. However, it assimilates the series of losses that the papers of the companies listed on Wall Street registered in the sessions on Thursday and Friday, when there was business abroad.
This Monday, the ADRs and shares of Argentine companies listed in dollars on Wall Street operate with a mixed trend. They highlight the gains of around 2% for Edenor, Tenaris and Telecom titles.
Meanwhile, Argentina’s Global bonds – in dollars with foreign law – gave up a slight 0.5% on Wall Street, while the risk country from JP Morgan, which measures the gap in return rates of US Treasury bonds with similar emerging issues, amounts to 15 integers for Argentina, in the 1,430 points basics.
“In a key week for the Government, the focus of attention will continue on Congress, since the Chamber of Deputies must ratify the half-sanction of the Bases Law and the Senate’s fiscal package, or persist with the original version,” contributed by the analysts of Bridge.
“In another order, the Gross Domestic Product (GDP) for the 1st quarter will be known, the last one registering a contraction of -1.4% year-on-year, and unemployment for the same period. In addition, the economic activity for April and the June Inflation Expectations survey from the Torcuato Di Tella University will be published,” they noted from Puente.
Jorge Fedio, technical analyst at Clave Bursátil, indicated that a “lower blow was felt in the ADRs -between Thursday and Friday, badly-, which showed a drop of around -10%, so that today, Monday, it should have an impact on our Stock Market. Of course we don’t like that ADRs accuse such a misstep. It is scary, but not surprising, as we already warned, our Stock Market is attentive and in step with Congress, in step with political noises. This is how that very high volatility arises and is generated in the market that is so valuable for negotiation, between purchases and sales.”
“We know that the Base Law is going to have resistance, the opposition movement is very active, but there is a political consensus that it will come out anyway. To all this, the most urgent thing, the swap with China for the equivalent of USD 5,000 million was renewed until July 2026. IMF approval was also obtained on the eighth review of the aid package and releases a disbursement of USD 800 million, given that Argentina has over met the organization’s objectives . Likewise, the World Bank will give Argentina credits for USD 2,000 million,” commented Jorge Fedio.
“Our ‘Short Term’ portfolio is designed for more aggressive investors who want to capture the good dynamics that we see ahead in the Argentine market. Exposure to Bopreal Series 3 is a low to moderate risk investment with an attractive interest rate in dollars; while the position in GD35 is responsible for boosting the portfolio’s returns, being the highest risk asset,” he stated. Ignacio Murúafinancial advisor for SBS and Quicktrade.
“We understand that the Argentine sovereign curve has a lot of potential if the country’s macro variables adjust and the Government’s plan comes to fruition; and we understand that the best way to capture the returns offered by this scenario is with the long stretch of the sovereign curve. We also believe that it is useful to allocate a portion of the portfolio to our Renta Pesos Common Investment Fund after the sharp drop in the CER curve in recent rounds. In addition, these instruments will protect us if inflation for the next twelve months is higher than expected,” Murúa added.
