Bonds and stocks flew and not only thanks to money laundering: there were foreigners who bought Argentine assets

Bonds and stocks flew and not only thanks to money laundering: there were foreigners who bought Argentine assets
Bonds and stocks flew and not only thanks to money laundering: there were foreigners who bought Argentine assets

The market gave its ruling in the face of positive news such as the veto of the University Financing law and the assurance that capital and interest on sovereign bonds will be paid when they face the high maturities of January. For this reason, yesterday was one of the rounds of the most post-whitening euphoria. Bonds and stocks flew. Financial dollars collapsed. The gap between the official exchange rate and the MEP is only 22% and investors are sniffing the exit of the stocks.

The market takes justice into its own hands. Today the free dollar is more expensive than the MEP dollar, which fell $21.84 (-1.87%) to $1,147.70. The “blue” closed at $1,175, the same value as the previous day.

This situation makes it more advisable for foreign tourists to pay with a credit card (where they take the value of the MEP) than to sell dollar bills on the free market, where they are paid $30 less than the selling value. In other words, paying with a card they have a profit versus the $80 bill per dollar. It is the opposite of what happens to Argentines who travel abroad, who must pay one dollar for a card at $1,592.80.

The lack of pesos meant that financial dollars had more sellers than buyers. Cash with settlement (CCL) opened at $1,208 and soon pierced the $1,200 floor by falling $19.3 (-1.6%) and closing at $1,191.25.

In the Free Exchange Market (MLC), USD 427 million were traded due to the greater supply of foreign currency from exporters that allowed the Central Bank to purchase USD 120 million. Despite the acquisitions, reserves fell by USD 41 million to 28,347 million due to the withdrawal of dollars that had come in due to money laundering that took away the Central Bank’s reserves.

Last Friday, dollar withdrawals due to money laundering were lower than those of previous days. Depositors withdrew USD 69 million and private sector dollar deposits now total USD 30,038.5 million.

The report by Andrés Reschini’s F2 consulting firm noted that “the markets in the United States left mixed signals. On the one hand, the S&P 500, Wall Street’s main index, closes higher (+0.71%) driven by sectoral increases and, on the other, the Federal Reserve minutes reveal that some of its members are more inclined towards a path of more gradual rate cuts. The move helped Treasury yields rise above 4% and further strengthen the dollar. Given this context, emerging bonds suffered again, but this did not stop the rally in local sovereign debt.”

Sovereign bonds had another round of increases, but this time of magnitude, particularly for Global bonds that are covered by foreign law, where GD35, one of the most sought after, rose 3%. In the Globals there were titles that rose more than 4%, as was the case of GD41D which increased 4.36%. Global 2030D, the benchmark for foreign law degrees, now has a parity of 63.55%. These values ​​caused the country risk to lose 67 units (-5.6%) to 1,121 basis points.

Juan Martín Yanzon, head of the ConoSur table, pointed out that “we noticed predominantly foreign taking hands in Globales and Bopreales, leaving the Bonares (titles with local law) somewhat relegated.”

Yanzon observed that “the demand for provincial or sub-sovereign bonds returned. There were notable deals in Mendoza 29, Córdoba 29 and Neuquén 30. The paradox is that the 2029/31 sections have taken on notable liquidity along with the corporate ones. Córdoba 25 is already trading at 98 and there are quite a few securities that have a return rate of less than 10% in dollars.”

Where the “boom” continued was in the corporate bond market after the successful placement at a rate of 7.65% of VISTA Negotiable Obligations. YPF renewed its bonds at a rate of 7.85%, because it regained the confidence of investors. This performance was what caused the company’s shares on the local stock market to increase 5.41%.

Bonds in pesos that adjust by CER, had generalized declines with little business, while the LECAP remained calm awaiting the result of the Treasury tender, which was also positive for the Government.

In the bidding they expected to raise $5.9 billion to cover the maturities, but since they gave a premium (higher rate) to the LECAPs they obtained $6.32 billion. The surplus of $830 million will be deposited in the Treasury account at the Central Bank.

The rates paid were higher than those in the secondary market as they reached a maximum of 3.90% against 3.80% the previous day.

For the financial analyst, Salvador Vitelli, “the tender surcharge has a cost of $40 billion.” Although the terms of the Treasury debt were lengthened, the most demanded LECAP was the one that expires in January, which absorbed $1.65 trillion attracted by the highest rate of 3.90%. The other LECAPs did not exceed one billion pesos, even though the one that expires in August paid the same rate.

The two BONCAPs tendered, which have the same characteristics as the LECAP but are longer term because they expire in October and December 2025, were attractive, particularly the one that expires at the end of next year, which raised $1.05 billion and paid a rate of 3.90%.

Two of the three bonds adjusted by CER had irrelevant offers and the third, which matures in March 2027, was declared “void.”

The only bond tied to the dollar (dollar linked) that expires on the last day of 2025 raised $160 million and was in line with what is happening in the futures market where all implicit rates closed at minimums. At the end of the year it was quoted at $1,059, a value that is equivalent to 38% annually. For the official dollar to reach that price, it would have to rise 8.47% starting today, when at the current rate of devaluation it indicates an increase of 6.10%.

The Stock Market had its day of celebration and the shares of energy companies shined. Businesses grew considerably and the S&P Merval of the leaders increased 2.84%.

The increases were led by Edenor (+5.66%), Transportadora Gas del Sur (+6.65%) and YPF (+5.41%).

ADRs – certificates of ownership of Argentine shares listed on the New York Stock Exchange – had general increases and the best was Edenor with an increase of 7.6%.

Today the inflation index for September will be known and will mobilize the price of the LECAP that adjust by fixed rate. Sovereign bonds can continue their recovery because there is room for risk and because foreign players entered.

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