Monday, March 4

Argentine shares fell more than 7% on Wall Street waiting for signals by agreement with the IMF

The fall of Mercado Libre happens in tune with the collapse of the Nasdaq technology index on Wall Street, which fell 3.74%. Shares of Meta Platforms, the parent of Facebook, sank more than 26% after reporting disappointing forecasts that triggered a wave of losses in other stocks such as Twitter, Pinterest and Snapchat.

For its part, The leading stock index S&P Merval extended Wednesday’s downtrend and lost 1.8% to 88,091.28 after falling 1.9% in the previous session.

In the leading panel, the greatest decreases were led by the papers of YPF (-4.4%), Central Puerto (-3.8%) and Grupo Financiero Galicia (-2.7%). And on the other hand, the rises of Edenor (+4%), Cablevisión (+3.1%) and Cresud (+0.9%) stood out.

The market operated this day with caution while waiting for what may happen in Congress with Argentina’s agreement with the IMF. The principle of understanding has a duration of two and a half years, involves a “gradual” reduction of the fiscal deficit and forecasts that international reserves will grow by US$5 billion in 2022.

But nevertheless, This agreement created political tensions in the ruling party that culminated in the resignation of Máximo Kirchner as head of the FdT bloc in the Chamber of Deputies., who disagreed with the understanding reached by the national administration. Germán Martínez was finally appointed to replace him by President Alberto Fernández.

“The strength of the agreement did not end up eliminating all doubts, although the signs of the event are totally positive, caution before acting is still present because there are still economic unknowns to resolve and an agreement to finalize”, explained Javier Rava, director at Rava Bursátil.

For its part, the SBS Group assured that “The repercussions of Máximo Kirchner’s resignation from the presidency of his bloc in the Chamber of Deputies continue, while the government intends to have the agreement with the IMF closed by March.”

In his analysis, Gustavo Ber maintained that “investors hope to have more clarity about the state of the coalition of the ruling party, which is crucial not only to manage the almost two years of mandate ahead but also to advance in the principle of agreement with the IMF. This is because not only legislative approval is required, but broad political support will also be needed to move forward with the implementation of the economic roadmap, which includes serious commitments to fiscal and monetary targets.”

In equities, during this day, the volume operated in Cedears rose 2% to $5,055 million, which represented 85% of the total. While $978 million in local shares were traded.

Argentine bonds closed with a majority of losses in a small and selective business market, while the risk country prepared by the JP Morgan bank rose 1.85% to 1758 basis points.

At fixed income segment, sovereign bonds in dollars lost up to 2.5% led by the Bonar 2030. The Bonar 2029 (-2.2%), and the Global 2035 (-1.9%) also fell. However, the rise in Global 2046 (+4.3%) stood out.

As reported by the SBS Group, dollar-linked bonds lost, on the long side, 0.75% on average. For your part, the TV22 bonus ended without changes. While CER-adjusted bonds in pesos gained 0.3% on average this Thursday in the short and medium section of the curve.

“Operations were concentrated on TX22, while sales orders were seen on the long side (DICP, PARP),” Grupo SBS analyzed.