And the dollar? It remains calm after the blue moved away from the historical records seen in the hectic days of the last fortnight of January when it exceeded $1,200. According to the latest survey carried out by the BCRA, the market estimates that by the end of the year it will be at $1,300.
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What bonds to invest in?
The change in the market lowered the yields of the Money Market Investment Funds, which now pay between 40% and 60% maximum. These are one of the instruments most used by Argentines, who operate them through virtual wallets and banks. There, for example, Mercado Pago stands out, which has the largest number of users but one that has the least return for the investor.
The reduction in returns on virtual wallets and FCI discourages individuals from seeking returns in these instruments, encouraging alternatives such as CER bonds and longer duration fixed rate treasury bills.
A report from the Grupo IEB brokerage company simulated scenarios to calculate the yield of the bonds based on the sharp reduction in inflation and an upward shift in the curve with levels that could anticipate an exchange rate unification.
“Using these assumptions, we observe that the middle and long part of the CER curve is yielding above what a fixed term will yield after the rate cut, which will be around 3.4% TEM. Therefore, we believe that the The middle and long stretch of the curve is close to the floor at these levels,” the report states.
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But he adds: “However, there is a risk that inflation will decline more sharply than what the bonds have incorporated into their prices, so if this inflation path materializes, the CER bonds could correct a little more, since they are left with yields below 3.4% TEM. We particularly like the TX26 which even in the most adverse scenario continues to offer very competitive yields.”
Likewise, he warns that “despite the approval of the Base Law and the fiscal package in the lower house, hard dollar debt continues to lateralize, with the GD30 and AL30 finding resistance at the levels of USD 60 and USD 63 respectively. “. It is worth noting that bonds closed last month with average increases in the case of 2030 bonds of 8.6%. Since the beginning of the year they have accumulated an average return of 53%, while since the runoff the return has already added up to 106.7%.
Investments in CEDEARs
Regarding investments in CEDEARs, IEB Group recommends the SPY fund, the DIA ETF, Berkshire Hathaway (by Warren Buffett), Coca-Cola, Mercado Libre, UnitedHealt Group, Mc Donald’s, QQQ ETF, Vista Energy, Nvidia, Amazon, Meta, Alphabet, Microsoft, Walt Disney , and the EEM ETF.
For its part, PPI coincides with some such as the Spy ETF, Coca-Cola, QQQ, and EEM. And add ExxonMobile, Chevron, Bank of America, Johnson & Johnson, Procter & Gambel, Verizon, and JP Morgan.
