© Archyde.com/AGUSTIN MARCARIAN
Pedestrians walk in the financial district of Buenos Aires. Argentina
By Walter Bianchi
BUENOS AIRES, Jan 18 (Archyde.com) – Argentina’s sovereign bonds and stocks closed lower on Tuesday hit by rising risk aversion amid doubts regarding an early debt restructuring deal with the International Monetary Fund (IMF).
The Argentine foreign minister, Santiago Cafiero, was meeting this Tuesday with the secretary of the United States Department of State, Antony Blinken, in the framework of negotiations with the international credit organization.
“The lack of political progress with the opposition accentuates the uncertainty regarding the support and the viability of closing an agreement with the agency (IMF) before 22-M, hence different scenarios are beginning to be evaluated,” said Gustavo Ber, economist of study Ber.
He added that “in this sense, the expectation is focused on being able to find some mechanism to postpone the bulky maturities, even when it is recognized that said result would not arouse enthusiasm among investors, as would have been the case if a comprehensive economic plan was agreed upon that includes move forward with the correction of macro imbalances over time”.
Analysts estimate that in the face of a maturity of 2,879 million dollars to the IMF in March and with reserves in a critical state, the probability of a delay in payment compliance increases.
“We have a set of economic and social objectives and, of course, we want to fulfill our commitments, but we need time. We need that by that time we are not charged such a conditionality that stops the recovery and inhibits Argentina’s development capacity in the medium and long term,” Economy Minister Martín Guzmán said in an interview with the AFP news agency.
* Bonds in the local over-the-counter market fell 1.3% on average, led by dollarized issues. Traders said rates of return on dollar bonds exceeded 25% a year reflecting market doubts.
* The fall in dollar assets of the South American country, which accumulated a drop of more than 12% in the first sessions of 2022, is reflected in an increase in country risk that once once more reaches historical maximum levels of around 1,900 basic points.
* The country risk prepared by the bank JP.Morgan rose 23 units, to 1,905 basic points towards 2000 GMT, surpassing the previous record noted at the end of November.
* “Bonds are reflecting the combination of low (central bank) reserves with uncertainty regarding the IMF negotiation, worse prospects regarding the harvest, and an external environment where major central banks are shifting towards less accommodative monetary policies” said Roberto Geretto of Fundcorp.
* The public debt of the southern country grew by 9,848 million dollars in December, reaching a historical maximum level of 363,362 million dollars in 2021, according to data from the Ministry of Economy.
* In the stock market, the leading S&P Merval index fell 1.98%, to a provisional close of 83,350.61 points, thus cutting the gain in the first days of the year to a slight 0.18%, following accumulate a 63% improvement in 2021.
* Operators commented that new Cedears of nine ETFs (Exchange Traded Funds) began to operate in the local market, which will give greater agility to the operation.
* “Cedears continue to gain space in investment portfolios. The market is gaining depth and continues to lead the volumes traded in variable income instruments in the local market,” said Portfolio Personal Inversiones.
* In the exchange market, the interbank peso depreciated by a controlled 0.08%, to 104.16/104.17 units per dollar, with the permanent regulation of liquidity from the central bank (BCRA) that had to supply the genuine demand of the market.
* “After 12 consecutive rounds without sales, the BCRA had to meet the demand for foreign currency with sales of some 50 million dollars,” said Gustavo Quintana, operator of PR Corredores de Cambio.
“In the first two days of this week, the wholesale exchange rate advanced thirty-three cents, once morest a rise of twenty-eight cents in the same period of the previous week,” he added.
* The currency fell 18.09% in 2021, well below annual inflation, which reached 50.9% according to official data, which in the opinion of analysts represents a large foreign exchange delay.
* In the alternative exchange segments, the stock market “counted with liquidation” (CCL) operated with a significant drop to 212.8 units per dollar, the “MEP dollar” was traded at 203.8 pesos and in the informal market or “blue ” fell to an all-time low of 211 units per dollar.
(Reporting by Walter Bianchi; With the collaboration of Hernán Nessi; Editing by Eliana Raszewski)