Saturday, September 30

Argentine ADRs fell as much as 10.3%, and dollar bonds lost another 3%

In the Buenos Aires stock market, the S&P Merval index of Argentine Stock Exchanges and Markets (BYMA) fell 2% to 83,350.61 points, which cut the gain in the first days of the year to a slight 0.2%, after accumulating an improvement of 63% in 2021.

Of the local stocks, the falls in Central Puerto (-5%) and Transportadora de Gas del Norte (-4.2%), while only Cresud (+0.8%) and BYMA (+0.7%) were positive.

The market was attentive to the meeting between Foreign Minister Santiago Cafiero and the Secretary of the United States Department of State, Antony Blinken, within the framework of the 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 organization (IMF) before 22-M, hence different scenarios are beginning to be evaluated”said Gustavo Ber, an economist at the Ber study.

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 advancing 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 agency.

This Tuesday new Cedears of nine ETFs began to operate in the local market. “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 global context, it was a tough day for Wall Street with the S&P 500 falling 1.7%, after the arrival of some disappointing balances in the fourth quarter of 2021 (Goldman Sachs fell 7% after reporting lower-than-expected results) . It also weighed on the fact that the 10-year bond rate rose 8 basis points to 1.87%.

Bonds and Country Risk

In fixed income, the main bonds in dollars fell to 3.2%, led by the Bonar 2041. The return rates of the bonds in dollars exceeded 28% per year, that is, default levels.

The fall in assets in dollars, which accumulate in the first sessions of 2022 a drop of more than 12%, is reflected in an increase in the Argentine Country Risk, which once again reaches historical maximum levels of around 1,900 basic points.

The index prepared by the JP.Morgan bank rose 23 units to 1,905 basis points, surpassing the previous record scored at the end of November.

In the segment in pesos, on the other hand, dollar-linked sovereign debt had a day of great activity, rising 0.3% on average along the curve, with interesting volume on TV22 (+0.2%).

Finally, the bonds in pesos with CER adjustment gained an average 0.5%, also with good volume, concentrating operations on TX22 (yields -4.1% TNA and matures on March 18).