Xavier Curzel, economist in ACA Values, He pointed out that “taking the last day of listing of the IMV (Merval) last year, its value measured in dollars reached US$401.44. As of October 12, 2022, the value measured in dollars of the Merval is US$471.96. This indicates a increase-gain of 17.57% in dollars so far this year by the Merval”.
At this point, he highlighted: “In the long term, Argentine stock prices continue to look attractive, and they continue to be punished. This is reflected in the price of ADRs in the US, many of which (GGAL, YPF, LOMA, SUPV, TEO, IRSA) have not yet recovered their pre-pandemic value. Like the Merval index measured in dollars, whose pre-pandemic value was around $500.”
As for the rises that the shares had, Mariano Torres, portfolio manager at Quaestus Advisory, considered “despite the fact that Argentina is in a complex situation, we observe that companies, from the capacity to generate money, do not have high risks and are achieving sustained and growing returns. Likewise, there are a number of investors who dedicate themselves to investing in companies when their intrinsic value is greater than their market value, given that they consider them to be good entry points in the long term”.
In this line, he highlighted that the Argentine dynamic was asynchronous with the world. “The country comes from a process where there was a fall in all assets, and now that valuations fall globally, locally it does not happen. What is also true is that the Merval is extremely cheap and for profitability to translate into profits is more complex due to exchange restrictions, which means that the valuation that the market gives to those profits is much lower than other places ” , raised.
agree with the analysis Santiago Ruiz Guiñazu, head equity sales & trading de Adcap Financial Group: “We know that Argentina comes from four years with its actions very punished and prices are at a very low level, so any improvement can generate a significant jumpbut we believe that such a scenario could happen in any case next year and it will depend on the political context, the exchange rate situation, the accumulation of Central Bank reserves”.
Going forward, Ruiz Guiñazú considered that “the performance of Argentine stocks between now and the end of the year will depend a lot on what happens in the rest of the world.” “Recently, the monthly inflation data in the United States for September was twice as expected, 0.4% versus 0.2%, and there is concern in the market about this situation and that of Europe. On the other hand, there are the presidential elections in Brazil, which have a great impact on Argentina, so we do not expect a different end of the year and with an improvement”.
Likewise, Curzel He warned that in the coming months the local and international context will not help. “At the local level, measures were taken that had a positive impact on some variables such as the increase in reserves, the MEP dollar had relatively little rise in the last two months, and the interest rate increase improved time deposits. However, it is still necessary to demonstrate clarity and predictability in the measures to market agents. In the international sphere, the fear of a recession, the strengthening of the dollar and US fixed income with current yields, causes flows destined for emerging markets to concentrate on such assets. I believe that they can continue to rise, but taking into account a considered volatility in the markets.
Source: Ambito
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