Portfolio managers look for hedging options in the expectation of an eventual devaluation with a subsequent high nominal value.
There are several portfolio managers in the market who assume that the correction towards a new exchange rate regime in a next government it is going to be carried out in a traumatic way. Taking as a base scenario that in a first round Freedom Advances turns out to be the space with the most votes, from there speculations are woven about a “strong acceleration of nominality”, a euphemism not to mention the word hyperinflation.
That is why in this highly turbulent context, the financing in pesos that the Finance Secretary It is an element to take into account. In the first half of October, it already managed to add just over $817,000 million in local market financing. 99% was realized through instruments tied to the price of the dollar in a context in which the government has been closing all avenues so that investors can jump directly to the refuge offered by the North American currency.
As reported by the Treasury Palace, after the first debt tender that took place on Thursday, October 12, in which $796,555 million were placed, In the second round for the entities that make up the group of market makers, another $20,424 million could be found. The level of the roll over until the middle of the month is ultimately 108.6%. For the second call of the October 27, there are maturities in sight for $505,000 million and The result of the elections will depend on the offer made by the Secretary Eduardo Setti.
Personal Portfolio Investments (PPI) states that “the high exchange rate gap and the increase in devaluation expectations in the futures markets suggest that an adjustment of the official exchange rate would be unavoidable, leading investors to seek coverage.” Thus, in the last five wheels, The Dólar Linked Funds received positive net flows of $279,569 millionwhich contrasts with the net bailouts since FCI Money Market (-$491,058 million), T+1 funds (-$80,948 million) and FCI CER (-$68,335 million),” indicated the alyc.
Martin Polo, Cohen’s chief strategist, states that expectations indicate that the change in the exchange rate regime in the event of a change of government “will occur through a shock.” “It remains to be defined whether the subsequent dynamics will lead to a disorderly environment, with very high volatility, and in which the probability of hyperinflation gains ground,” Polo says in a report. The economist considers that “the expectations of an orderly and collaborative transition have lost relevance, and everything indicates that we must prepare for months of extreme tension, similar to periods of crisis.”
For his part, the consultant Salvador Distéfano proposes the hedging strategy based on linked and dual dollar bonds offered by the Treasury. The consultant considers that You can access a dollar between $350 and $433 by buying bonds tied to the official exchange rate that expire in April or September of next year because it is assumed that with a significant devaluation they soon have a lot of profitability to offer.
Maximilano Donzellifrom Invertir On Line, suggested “rebuilding safe strategies to preserve the value of capital, with which the recommendation is to maintain ‘dollarized’ positions, since assets in pesos are facing a context with high volatility, and would not be advisable for conservative investment profiles.
Source: Ambito
