Tuesday, January 18

Argentine stocks and bonds continued on a streak: in 5 days they accumulated increases of up to 17%

An Argentine economic team has been in Washington since the weekend to seek to advance in a desired agreement with the multilateral organization, while analysts believe that the possibilities grow despite the differences between the parties on how to finance a fiscal consolidation.

The day’s rises in Argentine papers on Wall Street were starred by Free Market (+ 6%); Central Puerto (+ 5.5%); and Globant (+ 5.4%). In the accumulated monthly, the podium of the highest rises is entered the podium of the biggest climbs is entered by YPF (+ 17%); Transportadora Gas del Sur (+ 16.1%); and Pampa Energía (+ 15.3%).

Faced with this panorama, the S&P Merval index of Bolsas y Mercados Argentinos (BYMA) gained 1.2%, to 89,310 points, after accumulating a rise of 2.2% on Monday and climbing 7.5% during the previous week.

The winners of the day were the papers of Central Puerto (+ 4%); Telecom (+ 3.3%); and Cablevisión (+ 3.1%).

While the Argentine mission continues negotiating in Washington, a US official asked on Tuesday that the country and the IMF sign a “solid” agreement. At a regional conference organized by Eurasia Group, Juan Sebastian Gonzalez, Director for the Western Hemisphere of the USA said that “The IMF has learned that you cannot always use a model to prescribe macroeconomic policies in a political environment, you have to recognize the internal context, the factor endowment, at the end of the day Argentines have to come up with a plan.”

“Both parties must reach an agreement that is solid on its merits”, held, and estimated that “It could be transformative for Argentina and our bilateral relations.”

Meanwhile, analysts and traders estimate that Next week the Government will present to Congress a multi-year economic plan in addition to defending the 2022 budget project.

But beyond the local situation, it also helped the Argentine papers an increase in the appetite for risk assets due to fewer fears for the omicron variant of coronavirus.

World stock markets and oil rose strongly for the second day in a row, by a Increased confidence in reports from South Africa that omicron cases there had only shown mild symptoms.

Country risk and bonds

The Argentine Country Risk fell this Tuesday for the fifth consecutive day and pierced 1,700 points, almost at levels prior to the legislative elections, amid another strong rise in Argentine bonds, before the enthusiastic investor for the negotiations with the IMF.

The index measured by JP Morgan it fell 2.8% to 1,698 basis points, its lowest level in three weeks. So far this month, this indicator accumulates a decrease of 11.3%.

All in all, dollar bonds extended their bullish rally, gaining up to more than 4%, with rises led by the Bonar 2029 (+ 4.7%); the Bonar 2038 (+ 4.6%); the Bonar 2035 (+ 4.2%); the Bonar 2041 (+ 4.2%); and the Bonar 2030 (+ 3.6%). For their part, the Globales showed increases of up to 3.5%.

In five consecutive wheels, these titles accumulate a rebound of up to 17% (Bonar 2030).

The Minister of Economy Martin Guzman said this Tuesday that the country has “a financial economy that does not reflect the reality that is being lived in terms of the economic recovery of Argentina, with bond prices that do not reflect in any way the capacity of the Argentine economy to generate income in foreign currency.”

“The rumors of progress on an understanding with the IMF are what are pushing the prices of bonds the most. Also, today is a very good day on the international level with an improvement in the appetite for risk. It is the best possible combination. “, commented to Ambit Nery Persichini, chief economist at GMA Capital.

For his part, Fernando Staropoli of Rava Bursátil indicated that “Until a few days ago (bonds) were seen to tread alarming prices that broke records between historical lows, however, in the last wheels an improvement in enthusiasm can be noticed on a par with the higher expectations of an agreement with the IMF “.