This Monday the Ministry of Economy will deposit approximately US$1,000 million in the accounts of private investors corresponding to interest on bonds in foreign currency. Beyond the uncertainty that there was last week in the market about the future of the negotiations with the International Monetary Fund (IMF), It is expected that with the money in their possession they will reinvest some US$650 million at face value or about $195 million in cash terms. And it is that with some exceptions, the titles in dollars and euros of Argentina have been a good business so far in 2023.
What is called “electoral trade”, that is,the positioning of investors in local assets taking advantage of depressed values waiting for an improvement after a potential change of administration, it has generated actual gains of up to 49% on some stocks if entered when they were at the 2023 lows. Those who are betting that in the coming weeks the team led by Deputy Minister Gabriel Rubinstein and the chief adviser Leonardo Madcur will reach an understanding with the demanding IMF staff, some chips will be at stake.
The Government will allocate US$355 million to the payment of AL29, AL30, AL35, AE38 and AL41 (local law). In addition, it will pay US$627 million for GD29, GD30, GD35, GD38, GD41 and GD46 (foreign law in dollars). Finally, it will cancel US$40 million for GE29, GE30, GE35, GE38, GE41 and GE46 (foreign law in euros).
Eduardo Setti, Secretary of Finance, confirmed through his social networks a week ago that the payment notice was presented to the market. Setti said on his Twitter account: “Following our usual schedule, we will be making the payment of the coupons of the titles denominated and payable in foreign currency.”
According to the stock company Invest On Line (IOL) the title that has shown the best performance since January is AL29, which on the first day of the year was trading at US$24.1 and as of July 7 it was already at US$29.2. If the investor entered at the lowest value of the year at $20.5, he earned 42.6%, and if you bought on June 6, at $25.4, you achieved a return of 15.1%.
The best investment of all has been the AL35 if you were lucky enough to buy at $20, which is the lowest price it was this year. Today the title is trading at $29.7, which marks a profit of 48.5%. Since January 1, paper has gained 11% and in the last 30 days, 23.8%.
Beyond the local component, also Argentine bonds have benefited from global flows to emerging markets at certain times of the year, depending on the rate policy carried out by the Federal Reserve of the United States. For the market, meanwhile, there are conditions for the good moment to continue.
Javier Casabal, fixed income strategist at Adcap Grupo Financiero, affirms that last Friday, at the close of the round, “some buyers appeared, expecting many to reinvest their coupons on Monday.”
“Many will already have the cash from these coupons in their accounts, and many may want to reinvest. To be conservative, if only 20% of the cash was reinvested, that would imply a demand for 650 million bonds (face value) next week, ”he estimated.
Source: Ambito
