“The immediate balance left by the polls must be sought in the financial sector, which sets the pulse of the market’s first reaction,” describes the consultancy Sarandí. Since the Friday before the elections, the Merval increased 34.8% measured at the CCL, “the largest increase in history for such a short period.” Among the 3 most notable actions, 2 were energy: the ADR of YPF climbed +56.9%, being the role that led the rally, and the stock of Edenor +43.1%.
Capital market experts consulted by Ámbito assure that although the market was anticipated, there is still room for a upside in some sectors. The focus will be on oil & gasbut also in generation, distribution and renewables, due to the new energy policy.
Guido Lanzilotta, director of Assur Capital, considered that at a general level, the energy sector “has been given greater weighting over others, due to the expectation that Vaca Muerta was having, and the incentive of the works around this development.” In fact, despite the uncertainty that was experienced during the electoral stage, “it had become clear that no matter who governed, the energy sector was going to be considered by the direct effect as a generator of foreign currency.”
In the same line, Fermin Ezequiel Lopezresearch analyst at Cocos Capital, also highlighted the sector above others: “It has a high weighting since it is a sector with a lot of potential, and the engine for a growing Argentina given these new positive expectations.”
Besides, Maria Moyano HidalgoInstitutional Sales Trader at Adcap Grupo Financiero, added: “Local macroeconomic risks are less likely to affect industries such as Oil and GasAgriculture and Power Generation (only renewable), while the Power Generation (non-renewable), Public Services, Telecommunications and Retail sectors are the most vulnerable to currency devaluations, economic recession and loss of purchasing power caused by the inflation”.
Although the market anticipated, there is still room for a upsideconsidered Diego Martínez Burzaco, Head of Strategy at Inviu. “The market anticipated what will be a more predictable regulatory framework from the tariff point of view and compliance with contracts, but there is still value in the long-term sector.”
What does the market like?
Regarding what to look at when thinking about an investment, Martínez Burzaco said: “I think the biggest upside It is observed in the electricity generation and gas distribution segment. But as for oil and gas producing companies, such as gas transportation, there are also opportunities. We believe that this is where the traded volume will be in the coming months, since institutional and retail investors will seek to have a position there.”
Each segment of the energy chain will have its driversanticipated López de Cocos Capital: “For generators, distributors and the Oil & Gas downstream, a spread is seen between the general and regulated levels, with inflation, it can be seen that there is a significant delay. In the medium term This gap should return to reasonable levels and tariff normalization would benefit the regulated companies.”
Between the oil & gas driversHe added: “The new connections will allow the development of Vaca Muerta to be promoted for export as well as for domestic consumption. By 2024, this sector expects an energy trade surplus of US$2.3 billion, and studies are being developed for offshore exploitation in Mar del Plata and Río Negro, which will boost production.”
At Adcap, Moyano Hidalgo reported that the overall credit situation in oil and gas is “adequate,” with cash coverage for short-term debt of around 1.1x, while non-renewables have the highest foreign currency exposure. , but “acceptable” at levels of less than 2.5x debt/EBITDA, without significant maturities in 2024.
About specific companies, in Adcap they mentioned: YPFbecause it faces maturities of only $628 billion in 2024, Transportadora Gas del Sur (TGS), because, although it is a regulated company, there is an important part of the business that is not regulated, it is “clearly exportable”, and it obtained the contract to operate the Néstor Kirchner gas pipeline. In renewables, they look closely YPF Luz and Genneiabecause of the announced plan to expand transmission lines, and because they believe that with Javier Milei it could be easier to finance.
Source: Ambito
