In the midst of a historic nominal record for the free dollar, stock market businesses in Argentina reduced prices this Wednesday through selective sales to take profits, a day after the market recorded a new intraday high in pesos. The fall also extended to sovereign bonds in dollars, as well as to the papers of Argentine companies listed on Wall Street, with drops of up to 7 percent.
The leading index S&P Merval of the Buenos Aires Stock Exchange lost 1.2%, to a close of 1,562,849 points, after setting an intraday record of 1,584,054 points in pesos. However, measured by the parity of the “cash with liquid” implicit in the shares, the Merval sank 5.9 percent.
This was reflected in full force in the prices of ADRs and shares of Argentine companies that are traded in dollars on Wall Street. The most representative of the equity Argentinian, YPF and Grupo Financiero Galicia sank more than 7 percent.
The political scene dominated the operation since the approval of the Senate in committee for the treatment of the “Bases Law” and the fiscal package to advance the economic deregulation advocated by the Government of the libertarian president is expected this week. Javier Milei.
Argentina’s dollar bonds also plummeted. The Global of the exchange -with foreign law- averaged strong drop of 4%while the Bonares -with Argentine law- fell 4.2 percent. He risk country of JP Morgan rose 100 units for Argentina, in the 1,394 points basics at 5:30 p.m., at the highest since April 3. For their part, public bonds operated in the Electronic Open Market (MAE) lost 0.4% in their average in pesos.
“Maintaining the surplus at current levels is not going to be easy because the recession affects tax collection. In fact, collections in March and April had a significant drop in real terms and it is expected that in May they will continue to be affected by the economic recession,” he explained. Walter Moralespresident and strategist of Wise Capital.
“We think that the recovery of the economy is going to be in a ‘U’ shape, but it should be noted that salaries seem to have found a floor in March. This is not necessarily going to reactivate consumption in the very short term – but it is an indication – because registered private employment fell 1.4% between November and March, something only seen in the last 20 years with the pandemic and the international crisis of 2008/2009. What’s more, we hope that 2024 will end with unemployment close to 9%,” Morales considered.
The Economist Gustavo Ber contributed that “domestic assets continue to lean towards a ‘wait and see‘, waiting for operators to glimpse a clearer political scenario, mainly due to the progress in the legislation of the Bases Law and the fiscal package as well as the conflict with Spain.
“It happens that they consider that achieving greater internal consensus and lower international tensions are important ingredients to be able to extend investor confidence within the plan to organize the economy in progress. So a sustainable fiscal surplus could be achieved, continue with the disinflation process, reactivate private credit after the sharp drop in rates and all of this improves economic activity,” added the head of Estudio Ber.
