Argentina’s Bank Bonds and Stocks: Winning Bets in 2024

2024-03-19 23:36:00
Argentina’s bank bonds and stocks are winning bets in 2024.

The rise in the prices of Argentine debt securities was highlighted this Tuesday through the incursion of new funds that allowed it to affirm parities and influence the country risk to fall once more to the minimum since September 2021.

The Global bonds of the exchange – in dollars with foreign law – advanced a resounding 2.4% on average on Wall Street and the prices are already comparable to the highs of September 2020, when these securities were listed. The most representative, the Global 2030 (GD30), closed at USD 50.65 in New York, close to USD 51.50 on September 10, 2020. Sovereign bonds in the Electronic Open Market (MAE) gained a 2.3% in its average in pesos, following rising 2.6% in the previous two operating rounds.

Fuente: Leonardo Svirsky-Bull Market Brickers (“X”: @leofinanzas)

In the same sense, JP Morgan’s country risk subtracted 45 points for Argentina, at 1,535 integers at 5:30 p.m. In the morning it reached 1,488 basis points, a floor since September 13, 2021, regarding 30 months ago.

Operators and analysts agree that the local financial market seeks to align itself with favorable macroeconomic indicators, despite the political disputes faced by the new Government of libertarian economist Javier Milei.

“The debt tied to the dollar (‘hard dollar’) registers a gain of 2%, with an increase of 1.6% in those of New York law and an increase of 2.5% in those of Argentine law, therefore, In this way, they accumulate a profit of 8.1% so far this month and 23.8% so far this year,” reported the liquidation and placement agency Cohen. ”Thus, parities average 45.3% and the country risk decreased (…) to its lowest level since September 2021,” she noted.

In turn, the leading index S&P Merval of the Buenos Aires Stock Exchange gained 0.5%, to 1,129,936 points, close to its nominal record of 1,134,440 points recorded at the beginning of February. Measured in “counted with settlement” dollars, the leading panel reached 1,042 points, a maximum since August 6, 2018 (1,058 points). Among Argentine stocks, the profits in dollars of Banco Macro (+58.9%), Banco Francés (45.6%) and Grupo Galicia (+41%) stand out in 2024.

Source: Rava Bursátil-prices in dollars.

The trade balance for February showed a positive balance of USD 1,438 million, reported the official statistics agency (INDEC), following the recent announcement of an unusual fiscal surplus in the first two months of the year.

Milei seeks to align the country’s accounts with a severe spending cut and end the strong inflationary escalation. In favor of macroeconomic improvement, although with serious social risks due to the high poverty and destitution suffered by Argentines, there is less exchange rate pressure, which allowed the BCRA to recently exceed the purchase of USD 10,000 million in the wholesale market since on December 11.

The amount operated in the cash segment of the wholesale market remained below the daily records of recent weeks this Tuesday and reached 316.3 million dollars. This slowdown in the liquidation of exports conditioned the volume of foreign currency that the Central Bank can access, which this time had to sell USD 73 million for its intervention and contribute 23.1% of the supply. This is the first sale on the market since February 29.

In March, official purchases reached USD 2,179 million. On the other hand, international reserves ended this Tuesday with a drop of USD 198 million, to 27,980 million dollars.

The price of the free dollar continued this Tuesday with the lateral movement that it has been exhibiting throughout March and adjusted the rise to only five pesos on the day, to be operated at $1,030 for sale, following having recorded a maximum of $1,035 following noon . In this way, the informal currency is worth the same today as at the end of February and gains five pesos or 0.5% compared to the last operating day of 2023.

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