Regarding the new lows, Nery Persichini, Head of Strategy at GMA Capital, stressed that “there is too much uncertainty and the reports from investment banks were lapidary with Argentina in the last few hours.”
Roberto Geretto, economist at Banco CMF, considered: “After yesterday’s fall, bonds set new lows, being even below what is considered recovery values in the event of a default. Therefore, it is expected that they will find a floor in these values, or even there may be some rebound, but far from having a rally given the political and macroeconomic uncertainty. For a greater deterioration or recovery, the macro outcome is going to be fundamental, in the sense of whether it is going to be possible to continue with the IMF agreement”.
For his part, Santiago López Alfaro, president of Patente de Valores SA, pointed out that “the market is adjusting to the new news, it does not see decisions that it likes and the bonds sought new lows, in a year that is not good for investors either. bonds in the world. “The flows have more sellers than buyers, there are still funds selling bonds bought 4 or 5 years ago, and there are no new buyers considering Argentine macroeconomic projections,” he added.
With a view to the medium term, analysts warn that a recovery or greater deterioration will depend on the management of key variables. Persichini underlined: “In the current state, the market is no longer reassured by words, but by facts and results. The first test that the minister must face is to keep the agreement with the IMF afloat. Without concrete fiscal facts, it will be very difficult for the bonds to recover in the short term.”
“A good scenario for the bonds would be that the political tension decreases a little and there is at least a ‘mini-plan’ in the style of January 2014, which makes the macro reach the elections without skidding, which of course has social costs to short term. A bad scenario is the current one, where political tensions continue to rise, macro imbalances continue to accumulate, and the gap and inflation each time go up one more step, where the long-term social costs are greater, “said Geretto.
For his part, López Alfaro considered: “We are at a very low level, which may represent a long-term buying opportunity, but it will not be resolved in the coming days. The time of the year with the lowest export liquidation begins, the economic plan is not defined, there is a fiscal deficit and many pesos on the street; these problems are discounted by the bonds”.
Source: Ambito
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