With local plazas without operations due to the holiday, American Depositary Receipts (ADR) of Argentine companies listed on the New York Stock Exchange were quoted with generalized declines on Wall Street, after the strong increases last week due to the approval in the Senate of the Bases Law. The IMF staff report, although it validated the approval of the first quarter goals, did not change the trend.
Among the ADRs, the most pronounced declines were those of Edenor (-4.8%), Transportadora de Gas del Sur (-4.6%), Pampa Energía (-4.5%), Banco Supervielle (-4.4% ), Central Puerto (-4.1%), Irsa (-3.9%), Loma Negra (-2.7), BBVA (-2.5), YPF (-2.2) and Cresud (-2 ,1). The only exceptions of the entire panel were Tenaris, which posted an increase of 2.3%, and Banco Macro, with 0.5%.
Meanwhile, the country risk prepared by the JP Morgan bank stood at 1,382 points. For their part, sovereign bonds also recorded the majority of slight falls with reds of up to 0.28%.
The country risk prepared by JP Morgan is located at 1,382 points
Regarding the reasons for these losses, the financial analyst Christian Butler He assured: “The reality is that the sanction of the law produced a positive result in the markets, both in stocks and bonds. Last week there was an interesting rise in all local assets, even the dollar also fell. But it is also logical that in the markets, once a specific event of this magnitude occurs, they have that reaction and then return to their background trend. It seems to me that the underlying trend, which we had been seeing days before the law was passed, was a correction compared to everything that Argentine assets had been rising. Then, the event passed, the reaction passed and you returned to that tendency you had previously.”
Buteler: “The underlying trend was a correction compared to everything that Argentine assets had been rising”
With the approval of the Base Law and the fiscal package, last Thursday the sovereign bonds in dollars and Argentine stocks rose sharply on Wall Street and in the Buenos Aires stock market. In addition, the International Monetary Fund (IMF) approved the eighth review of the goals for the first quarter of the year and announced a disbursement of USD 800 million. In turn, the swap with China was renewed for USD 5 billion until 2026.
In this context, dollar bonds rose on average by 9.2% in the case of Bonares with Argentine law. In this segment, the 10.8% gain in Bonar 2030 (AL30) was notable, which concentrates the traded volume. Global bonds with foreign law advanced 8.2% on average. Likewise, the index S&P Merval of the Buenos Aires Stock Exchange closed in 1,582,372 pointswith a weekly gain of 4.2% in pesos and 7.9% in dollars.
Even the revaluation of firms in the banking and energy sector in a single day according to their market capitalization amounted to a total of 1.7 billion dollars.
However, it should be noted that there were changes in the fiscal package and the reversal of the Income Tax and the modifications in the Personal Property Tax were ruled out, which implied key resources for public accounts.
“Although the rejection of the Personal Assets and Earnings reform generates noise, it is worth mentioning that they were rejected with simple majorities, so the deputies can insist on their original wording with a simple majority,” they noted from Balanz.
The Economist Gustavo Ber of Estudio Ber considered: ““I think the markets are taking a break after last week’s recovery from the ‘combo’ of positive political and economic news.”
The expert indicated that “the main ADRs are currently registering average declines of 1.5%, with the correction having its epicenter in banking and energy papers, since they continue to be those preferred by operators to quickly manage exposures.”
“Bonds are also weaker and thus lose an average of 0.2% in their dollar prices among the main references with NY legislation, even though analysis of positive scenarios that would leave a strong ‘upside’ grows among investors. “in case the ordering of the economy and the convergence of valuations extend to emerging markets.”
“During the local holiday, ADRs and dollar bonds appear more cautious after the positive reaction unleashed by the approval of the Bases Law and the fiscal package, even though some relevant chapters must continue to be discussed in Deputies, since it is considered a political and also economic victory to consolidate fiscal balance,” he stated.
Additionally, “said milestone is considered to mark the beginning of a new stage of government, which could recalibrate some of the emergency policies of the first period in order to lead to a new program with the IMF that provides fresh funds, feeds back to the positive expectations and managed to get out of the trap. This is maintaining the disinflation process, improving real rates for savers and the recovery of credit and investment, in search of contributing to a rebound in economic activity,” he concluded.
