© Archyde.com/AGUSTIN MARCARIAN
Operators in the Buenos Aires Stock Exchange. Argentina
BUENOS AIRES, March 29 (Archyde.com) – Argentina’s sovereign bonds consolidated their upward trajectory on Tuesday in response to the country’s recent agreement with the International Monetary Fund (IMF) to restructure some 44 billion dollars.
Despite the agreement, investors are cautious regarding the organization’s demands, which include growth goals, low inflation and strengthening of the central bank’s reserves (BCRA).
“The ‘Extended Facilities’ agreement with the IMF was approved last week, but with a not very friendly statement (…) that highlights the need for structural reforms and that in turn advances the first review of the program for May, so it becomes imperative for the government to get out of the ‘let’s see’ dynamic,” said the StoneX brokerage.
The market also joined the global optimism for signs of progress in the talks between Russia and Ukraine to end the war that has lasted more than a month.
* Bonds in the OTC segment ended with an average improvement of 0.6% average, once morest a firm increase of 2% in the previous two trading sessions.
* “Every bond buyer is thinking of a restructuring from 2023 onwards, when the country’s payment schedule is complicated. But at these prices, even in an aggressive restructuring scenario and with some haircut, there is still value,” he said. Ariel Manito of Portfolio Personal Investments.
* The Argentine country risk of the JP. Morgan bank fell 11 units, to 1,733 units by 2000 GMT, compared to the 1,083 points registered in 2020 following a million-dollar restructuring of private debt and a historical maximum of 1,991 units recorded at the beginning of March.
* “The bonds reacted positively to the final approval of the agreement, although many investors have doubts regarding the future of the domestic economy and whether Argentina will be able to comply with the reduction of the fiscal deficit agreed in the ‘Extended Facilities’ plan”, said Research for Trades .
* In the stock market, the S&P Merval index ended with a drop of 1.85% to a provisional level of 89,967.25 points, once morest a drop of 1.45% the day before.
* The wholesale peso registered a drop of 0.12%, to 110.81/110.82 per dollar, in a market with liquidity regulated by the central bank (BCRA) with purchases or sales of dollars from its reserves.
* “BCRA ended the second round of the week with sales of 40 million dollars, to meet the demand for foreign exchange,” said Gustavo Quintana of PR Corredores de Cambio, adding that “the accumulated figure for the month now falls to some 387 million dollars of net purchases in the foreign exchange market”.
* BCRA reserves climbed to just over 43.2 billion dollars on Friday, from almost 37 billion previously accounted for, due to the disbursement of the IMF following the agreement.
* The currency in the informal or ‘blue’ segment remained stabilized in the zone of 200 per dollar, and in the alternative circuits it was negotiated with improvements to 192.8 in the stock market “cash with liquidation” (CCL) and to 192, 7 in the dynamic “MEP dollar”.
* The BCRA would raise its benchmark rate by at least 150 basis points in April to a range between 46% and 48% annual nominal (TNA) due to the high rate of domestic inflation, according to a Archyde.com survey of market operators and analysts financial.
(Reporting by Walter Bianchi; Editing by Jorge Otaola)
