Monday, May 29

Argentine stocks and bonds stop falling and rehearse a rebound after heavy punishment

The leading index S&P Merval of Argentine Stock Exchanges and Markets (BYMA) it gained 1.6%, to 82,474 points, after losing 3% the day before and accumulating a decrease of 2.17% last week.

At the top of the profits, the papers of YPF and Pampa Energía posted increases of 3.5% and 2.5%, respectively.

On Wall Street, meanwhile, the ADRs of Argentine companies operated mixed, on a day in which Mercado Libre led the declines with a decline of 2.2%, while Despegar, up +6.4%, led the day’s most notable advances.

“Things did not change overnight but prices are very tempting and it makes the market go higher,” said a stock trader.

Argentina must pay the IMF this Friday a maturity of some 730 million dollars and another 365 million on February 1, before a bulky maturity of another 2,900 million dollars in March.

“We are working very closely with the Argentine authorities to develop a program that helps people. We need a program that sounds credible and that addresses the imbalances that the country suffers,” IMF Deputy Managing Director Gita Gopinath told reporters. “We understand that the social and economic situation is challenging, so we are taking a flexible and pragmatic approach in the hope of making further progress in the coming days,” he added.

“A strong signal of rapprochement between the parties in relation to the agreement between the National Government and the IMF will be essential for the Merval to rebound and approach 400 points (measured in dollars) again”, they said from a brokerage.

Bonds and country risk

In the fixed income segment, the main sovereign bonds in dollars operated with ups and downs, with returns exceeding 25% in dollars, in a selective business context.

“Not even the most pessimistic expected to start the year with such a beating, in fact, several dollars higher, many analysts highlighted how cheap Argentine bonds were”StoneX said in a report. “It is possible that, if the government complies with the next two payments to the IMF (will it?), which add up to around 1,086 million dollars, at least the collapse of them will be stopped”, he added.

Against this, the country risk, measured by the JP Morgan bank, It fell six basis points to 1,955 units, after hitting a record level of 1,969 units on Monday.

Meanwhile, dollar-linked sovereign bonds are trading mostly higher.

Meanwhile, bonds in pesos with CER adjustment extend bullish rally and climb up to 1.7% (PAR).