© Archyde.com/MARCOS BRINDICCI
Protocol act at the Buenos Aires Stock Exchange
BUENOS AIRES, April 4 (Archyde.com) – Argentina’s financial market closed with an upward trend on Monday, but with clear signs of investor caution given the complex inflationary outlook in Latin America’s third largest economy that conditions short-term business.
The uncertainty is generated just a few days following an expected agreement with the International Monetary Fund (IMF) to restructure some 44,000 million dollars in debt, basically with a rescheduling of maturities.
“The first quarter might close with inflation of up to 14% to 15%, which is worrying (…) With the agreement with the IMF, it will be vital for the central bank (BCRA) to accumulate some reserves during these months” said the economist Rodolfo Santangelo.
Reducing inflation, shrinking the fiscal deficit, raising interest rates and cutting energy subsidies are key demands of the agreement with the credit institution.
Retail prices in Argentina that rose 4.7% in February and would climb to almost 6% in March, a poverty level that stood at 37.3% in the second half of 2021 and political noise in the government coalition, hold the attention of investors.
* The Argentine country risk of the JP. Morgan bank dropped 22 units, to 1,692 basis points at 2000 GMT), becoming the lowest level since mid-December and once morest its record of 1,991 units noted at the beginning of March.
* Over-the-counter bonds reversed course, rising 0.8% on average, led by inflation-linked items, to climb 3.8% in the past seven trading sessions.
* “The agreement with the Fund was of little use, not because of the agreement itself, but because of the circumstances in which it was signed (…) It is an extremely ‘light’ agreement that was born knowing that the goals are going to be renegotiated and that has minimal goals. It is a bridge to reach the 2023 elections,” said economist Cynthia Moskovits.
* In this context, a recent Archyde.com poll estimated that the BCRA would raise its benchmark rate by at least 150 basis points in April to a range of between 46% and 48% nominal annual due to the high rate of inflation.
* The S&P Merval index of the Buenos Aires stock market advanced 0.9%, to 93,218.7 points as a provisional closing, through the push of energy companies while Argentina negotiates with its neighbors Chile and Brazil the supply of gas for the winter southern. This stock market is up 3.6% in the last four rounds.
* The wholesale peso lost 0.42%, to 111.56/111.60 per dollar with the usual regulation of the BCRA, an entity that had to part with some 10 million dollars in the search to level the market, operators said.
* In the alternative segments, the general increases were maintained, at levels of 190.7 units in the stock market “counted with liquidation” (CCL) and 191.5 in the so-called “MEP dollar”, for an informal or ‘blue’ strip with firmness up to 199 units per dollar.
* The uncertain global economic outlook derived from the Russian invasion of Ukraine deepened short- and medium-term doubts regarding an increase in the price of raw materials.
(Reporting by Jorge Otaola; Collaboration by Hernán Nessi; Editing by Walter Bianchi)
