2023-06-18 10:50:46
The economist Paula Gándara shared with Pulso her vision of the economic situationoh national politics, and tips for investing at times like the present.
ASK: What analysis do you make of the inflation data for May?
ANSWER: The market consensus was close to 9%, so 7.8% was quite positive. In any case, we think that in the coming months they might be similar to these levels and we would have to see how the last part of the year unfolds, where there is greater uncertainty because the new president would already arrive on December 10. It is necessary to see how the post-general elections political issue begins to play more, which is already playing at the moment. There will be more clarity.
P: The Central Bank maintained the reference rate. Does the convenience of a fixed term at 97% change substantially with this new inflation data?
R: No not at all. In relative terms, there are not large variations with such a high level of nominality. We do not recommend a fixed term. There are common investment funds t+1, that is, you can sell it one day and have the money the next day, whose objective is to follow the Badlar rate; that fund has had a return greater than that rate. Fund t+1 is more fluctuating, there may be some type of variation. Money market funds are totally conservative and invest in assets that are not on the market, such as fixed terms or sureties. The money market fund always goes up, steadily, until it yields 83%-84%, projected. The t+1 is above 100%-110%, because it has inflation and devaluation expectations that are very high. If you don’t want to have everything in t+1 because you want to be more conservative, you can put 50% in a money market fund and 50% in a t+1, and that way you can further boost the return over a conservative fund at while sustaining the level of liquidity. Fixed term is immobilization of funds, instead of immobilizing 30 days today I prefer t+1 funds, it seems to me that they yield more and you can disarm them in the same day. And another advantage of the funds is that they are fully diversified.
Q: What are the possible post-election scenarios?
R: The PASO will function as a general survey. The doubt is Milei, because in the provinces he is not capturing the votes that he was supposed to and he does not have a political apparatus, but there are political analysts who say that the result of the provinces is not representative with respect to the nation. There is uncertainty, not only with Milei, but with Bullrich and (Rodríguez) Larreta where it is not clear how the lists will be made up. We hope that someone from Peronism will arrive, someone from Together for Change and Milei. Milei saying that she wants to dollarize and the other two alternatives are more within the status quo, there would be continuity, more or less we expect similar measures, Perhaps other more political factors are at stake, who will be the economists, what will be the detailed economic program that we will learn as we get closer to the STEP.
P: In that context, Is it a good idea to buy dollars?
R: The dollar is a scarce asset. The dynamics of the Central Bank, which sells its reserves, the drop in demand for pesos, the gap between the official dollar and the alternative ones of around 100%, a very strong stocks, all of this means that there is, yes or yes, a need to exchange adjustment. Massa has the official dollar cruising speed close to 8% per month, similar to inflation. We don’t know what the dollar will be for the new government, but that eventually there will be an adjustment in relative prices, that’s for sure. We do not believe that Massa does itWe do believe that it will be part of a stabilization plan for the new government, which will have to take the bull by the horns. A plan that tells us ‘this is going to be the nominal anchor, this is going to be the value of the dollar, I’m going to do this with rates, this way I’m going to close the fiscal deficit, this way I’m going to get the resources to pay the debt, so I’m going to lower inflation, this I’m going to export, this I’m going to import’. Come up with a project.
P: Precisely,What should not be missing in that plan?
R: There are many measures to apply at the same time, and with a government that is not going to have the 100-day electoral honeymoon. People are tired. If you look at the surveys of the Central Bank, you see that from one month to the next the inflation outlook varies from 7% to 10%, it’s crazy. Expectations are unanchored, they have to be anchored, people don’t know how much inflation will be next month, how much it will be devalued, what will happen to rates. Today we are thinking of inflation of 9% monthly average, with the country declining strongly. We knew that the issue of the drought was going to be difficult, but it was more difficult than expected for the Central Bank. All of this generates a very significant deterioration in expectations, and it occurs in the midst of a heated electoral cycle, with a weak macroeconomy, with citizens tired of the economic and political situation. We have Massa’s “arrival plan”, we believe that it will arrive, but the one that comes will have to adjust and make a plan that can lead us towards stabilization.
Q: When you talk regarding the “plan to arrive”, “arrive” until when?
A: We arrived in August because there is little left. Massa is not going to devalue, it is the last thing he is going to do. If it continues to lack dollars, to support alternative prices, it may continue to tighten the traps in both the real and financial economies, continue complicating it, and establishing mechanisms that reduce the demand for dollars. The cruising speed for the official exchange rate at 8% gives you a breather too.
Who is Paula Gandara?
She has a degree in economics from the UBA.
He has a master’s degree in economics from the UTDT
He has extensive experience in the financial industry.
He was an analyst at the Ministry of Economy.
He worked in the United States at Morgan Stanley, Lehman Brothers and at the BBVA bank.
In Argentina, he held positions at HSBC and AR Partners.
She is chief investment officer (CIO) of Adcap Asset Management.
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