Finally, the Government has its Bases law and the fiscal package, after 6 months of debate in Congress. The ruling party managed to reinstate the income tax and modify Personal propertywhich represents a positive signal for a market eager for signs that support the rally of Argentine assets. Beyond the content of the reforms, what is truly significant about the final approval of the law is the political message that the libertarian management manages to project abroad, especially towards the investors who were attentively waiting for this signal.
However, it is important to note that the market is not completely satisfied. The slowdown in the pace of purchases by the Central Bank (BCRA) in June, together with the firmness with which some officials kick the debate on the stocks, They set the pace of the next signals that the Government must issueIn this context, the market is reminded that there is still a debt outstanding, but it is still celebrating the approval of the law.
The context
As explained to Ambit Santiago Lopez Alfaro, president of Securities Patent, the market reaction is expected to be positive. The analyst highlights a complex international context that did not accompany local assets and in fact harmed them “in which all the media noise is affecting, and the rise of the dollar has been coordinated with a sharp fall in the Brazilian real and the Mexican peso.” .
The situation in Latin America has been quite complicated in recent weeks, adds Alfaro. For the analyst, “bonds and stocks, despite having fallen from their highs, have had a good performance for the year. And sovereign bonds continue to rise in dollars quite strongly, and so do stocks.
Alfaro is conclusive in pointing out that after the approval of the Bases law, Argentine assets “will resume the upward path, but nothing out of the ordinary. Argentina will continue to rise, although it still has many issues to resolve.“.
The Law on Bases would attract attention from abroad
For its part, Gaston Lentini, investment advisor, shares with this medium that part of this news was already in prices. And although bonds and stocks did not recover the highs they had in May, for the analyst the important thing is that a door is opened so that from the outside “they look at us as a country that really seeks to be respected and respect its others”.
What the strategist refers to as the positive signal of “achieve consensus as a society in Congress, even with opposing forcess”, which opens the possibility of foreign capital coming to invest in the country. That being the case and with respect to the market, Lentini projects “a drop in country risk, at least back to 1,100 points“. That should push bonds up again..
And for national equity, the advisor reiterates his optimism, “first in the oil sector, then in the gas sector and then in the construction related sector“.
From Delphos Investmenthave a view similar to that of Lentini, and hope that once the Bases law has been unlocked and with its approval, they will allow, on the one hand, “unblock private investments and encourage the entry of funds from abroad”” and on the other hand, consolidate the fiscal adjustment in order to continue advancing in monetary normalization. Finally, it will be necessary to “attack” the exchange front, Under current conditions, the one that presents the greatest complexity, and where the risks are not only local, holds.
A sector: the Argentine jewel
From the risk rating agency, Fitch Ratings They celebrated the approval of the Law Basessince they believe that it will allow the momentum of the oil and gas sector to be maintained under a favorable operational environment “derived from a more transparent and predictable regulatory framework.”
At the same time, it estimates that the limitations in the medium term will continue to be associated with the evacuation capacity of the system, the lack of drilling and fracturing equipment, as well as limitations in the supply of human resources. However, it highlights that the entry into force of the RIGI ““It will be an incentive to promote infrastructure works for the exploitation of resources focused mainly on Vaca Muerta.”
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Cecilia Minguillón, Senior Director of Fitch maintains that the sector is preparing for a stage of expansion and that bond issues in the international market “have shown the appetite of investors for the sector in Argentina.”
Minguillón assures that the debt maturities for the next months of 2024 and 2025 of the sector are manageable, reaching US$0.8 billion and US$2.8 billionwhich are compared to more than US$3 billion of bond issues in the local market during 2023.
News in development.-
