Following the statements of the former presidential candidate for Together for Change, Patricia Bullrich, about his support for Javier Mileihe market It assigns better chances to the candidate of La Libertad Avanza (LLA) in the runoff compared to the initial scenario. Contrary to their ideas, they see that the chances of dollarization would be reduced in case of joint management. However, they assure that Sergio Massa would generate greater confidence.
“I had a talk with Milei and we forgave each other,” was the phrase with which Bullrich clearly stated his intention to vote for Milei, during a press conference at his office in Hipólito Yrigoyen. Although the candidate’s virtual Minister of the Interior, Guillermo Francos, thanked the former Minister of Security for the gesture, he clarified that “there was no agreement” but rather “spontaneous support.” But financial agents are beginning to speculate on a more “market friendly” economic policy.with an injection of moderation that Milei alone would not apply.
“There was a significant rise in Argentine stocks abroad, particularly in banks. There was also an intraday recovery in Globales, which had started with a negative trend. The feeling is that Bullrich’s support for Milei, while strengthening the libertarian’s chances in November, would take away momentum from the idea of dollarization at all costs,” anticipates Nery Persichini, head of strategy at GMA Capital. For the economist, distancing himself from this exchange rate regime, which would require a liquefaction of the Central Bank’s liabilities or a restructuring of the Leliq, “gave air to bank shares, the sector most exposed to the Central.” Banking sector firms stood out on Wall Street: Grupo Supervielle rose 7.1%; Galicia Financial Group, 7%; and BBVA, 6.8%.
The proposal to change legal tender was put aside by Milei in recent weeks, until Monday, when in an interview in La Nación he was forced to reinforce his ideas after the disappointment caused by his electoral performance. Thus, he confirmed that “neither dollarization nor the elimination of the Central Bank are negotiable.” Bullrich, with whom he could eventually command a joint management, repeated ad nauseam that his intention is to maintain the national currency and that the experiences of dollarizing “are few” and “were not successful.”
For Andrés Reschini, head of F2 Soluciones Financieras, a possible landing of the former candidate could diminish the possibilities of a dollarized Argentina, since “Milei in this scenario prioritizes that there is no K government and therefore becomes more pragmatic.” Following Bullrich’s words, the analyst highlighted the rise in dollar bonds, as much as the Merval, and financial dollars recovering part of the initial fall. Futures on Rofex also closed with upward rebounds of up to 9.4%. “After Bullrich’s statement, the market assigned greater chances to Milei than it assigned in yesterday’s session.”, concluded the specialist.
In a brief overview, sovereign bonds in dollars rebounded up to 4.5% on Wall Street and CER bonds operated with a majority of increases, mainly DIP0 (4%) and PR13 (3%). The S&P Merval rose 4.9%, to 686,238.16 units. In turn, the CCL dollar rose 0.1% to $888.91, and the MEP dollar advanced 3.4%, to $872.31.
On the other hand, for Sebastián Azumendi, Head of International Sales & Trading at Adcap Grupo Financiero, assets are actually rising because they carry the momentum of last Monday. From his point of view, the candidate of Unión por la Patria, Sergio Massa, brings “more security” to international investors, despite unsurmounted challenges, such as inflation. According to the specialist, The Milei-Bullrich agreement, “will not move the needle too much” and the market was expected to reactivate “after having hit bottom at the beginning of the week.” The Minister of Economy was almost 7 points ahead of Milei in the general elections.
The economist runs the same line Pedro Siaba Serrate, head of Strategy at Portfolio Personal Inversiones (PPI), who understands that the support of the hard wing of Together for Change for Milei “was discounted”, as well as the differences of radicalism. For the specialist, in the runoff race both candidates will have to approach the undecided voter, they will play the role of the Governors in their territory. In that sense, starting over would moderate the candidates, and the dollarization proposal would once again remain distant in the libertarian’s speech.