The general improvement in Argentine assets was clearly the opposite of the global trend amid uncertainty due to the lack of progress in the Russian/Ukrainian dialogue to stop the war events, which will condition the world economy in 2022.
Against this background, the ADRs of Argentine companies posted widespread increases, led by Cresud (+10%); South Gas Carrier (+9.9%); IRSA (+6.4%); Bioceres (+5.1%); and Central Port (+4.7%). The only paper that closed lower was Mercado Libre (-5.4%), conditioned by the fall of the Nasdaq (-1%).
In the Buenos Aires stock market, on the other hand, the index S&P Merval it jumped 3.5%, to 90,283.10 points, contrary to the trend of other markets in the world and in the region (Bovespa lost 0.2%).
The most outstanding rises of the day were recorded by BYMA shares (+9.9%); Mirgor (+7.5%); and Cresud (+7.4%).
The volume traded in private paper rose slightly to $1,487.6 million, representing 30% of that traded in equities. Thus, 70% of the total was operated on Cedears, whose daily amount dropped 13% to $3,313.8 million.
After days of intense negotiations, the Government accepted last minute on Wednesday the opposition’s request to vote only on the financing request and not on the economic program that it implies, enabling the Executive Branch to use its powers to comply with the agreement.
“The opposition sought to avoid being seen as validating the government’s economic policies, while the government sought to share the political cost of adjustment. We do not expect these developments to have a significant impact.”synthesized the City bank in a report.
After the approval of the Chamber of Deputies in Congress, which is estimated at dawn on Friday, the understanding to restructure some 45,000 million dollars must be turned over to the Senate and then have the support of the IMF board.
The new agreement with the IMF establishes that the payment period for each disbursement is 10 years, with a grace period of four and a half years, so the country will start paying the debt in 2026 and end in 2034.
“Global risk aversion continues to act as a conditioning factor for local assets, given the uncertain and cautious external climate, although this time they respond better to the expectations aroused by the possible approval in Congress of the agreement with the IMF”, said Gustavo Ber, economist at Estudio Ber.
Russia’s war in Ukraine entered its third week without achieving any of its stated goals, despite the thousands of dead, the more than two million refugees and the thousands of people sheltered in besieged cities under incessant bombardment.
Bonds and country risk
In the fixed income segment, dollar-denominated bonds recorded strong increases of up to more than 6%. The advances of Global 2046 (+6.2%) were highlighted; of Bonar 2041 (+3.7%); and Bonar 2038 (+3.4%).
This trend made the Argentine country risk of the JP Morgan bank fell 40 basis points, to 1,834 unitsfollowing scoring its all-time high of 1,991 units earlier in the week. In just two days he accumulated a drop of regarding 150 points.
Argentine bonds had fallen sharply in recent weeks, practically to price levels not seen since the last declaration of default. “On this occasion we understand that the drop in prices is due more to external than local factors, which leaves prices at extreme values at times of better domestic fundamentals,” said consultancy Delphos Investment.
“We believe that the change in the global context, added to the agreement with the IMF and the electoral perspective for 2023, might lead to significant price increases for domestic instruments”, he added.
