Market analyst Salvador Di Stéfano, one of the most listened to in the city of Buenos Aires, predicted in an opinion column what the recommended investments are for the coming weeks.
Next, the guru’s column:
The high interest rate in pesos paid by Lecap easily exceeds the inflation and devaluation expected in 12 months. Be careful with financing.
In the month of September, the devaluation of the peso was 2.0%, and everything suggests that in the following months an annualized devaluation of 26.8% per year will be consolidated. Lecap rates are at 3.7% monthly, this implies that we have positive rates in dollars that are very high. We could not rule out that in the coming weeks the government will proceed to lower rates in the next Lecap tenders.
Under the current scenario, business loan rates at 35% per annum look very high. This would imply an annual effective rate of 41.2% per year. If we compare this rate with a devaluation that could be 26.8% annually, this would leave us with a rate in dollars of 11.4% annually. This implies that today it is more convenient to take out a loan in dollars at a single-digit rate than a loan in pesos at a nominal rate of 35% per year.
Personal loans are being offered at a rate of 50% per year and a 5-year term, but we must keep in mind that these financings have a value-added tax incorporated into them, which people cannot take into account unless they are registered. Therefore, this tax operates as a cost for financing. The effective rate of a personal loan that is offered at a nominal rate of 50% per year and for 5 years ends up being 80.4% per year, it is a moonstone for those who pay it.
It is clear that with these rates offered in the market, it is in the best interest of economic agents to take financing in dollars or dissave dollars before going into debt. We believe that in the coming months, thanks to the increase in dollar deposits caused by money laundering, financing in US currency will increase, which will add to the supply of banknotes in the alternative dollar market.
In this context, we see that the government is going to slow down the devaluation rate, which is why we expect that in 2025 the wholesale dollar will devalue at a rate of 21.8% annually, and could be reached by the end of 2025. around $1,250.2. All this, if the assumptions of an economy that respects the fiscal surplus, the positive balance of payments and non-issuance of pesos in the market are met.
With the dollar at very low levels, the attractiveness of buying bonds in inflation-adjusted pesos increases, since today a bond like the TX26 yields inflation plus 11.0% annually, this bond pays a rate of 2.0% annually. Amortization and income are paid in 5 monthly and consecutive installments starting on November 9, 2024. A bond with a similar maturity, such as the Boreal series 3 in dollars, which pays a rate of 3.0% annually and amortizes in 3 quarterly and consecutive installments starting November 30, 2025, yields 11% annually. We expect inflation of around 26.8% annually and a devaluation of around 21.6% annually by 2025, making the scenario more favorable for bonds in inflation-adjusted pesos than for bonds in dollars.
One-year bonds, such as Boncap, are showing an internal rate of return of 53.57% annually, this results in a rate of 3.6% monthly. These bonds are showing very positive interest rates against inflation and the expected devaluation rate in 12 months.
Conclusion
. – The interest rate of Lecap and Boncap are highly positive compared to the rate of devaluation and inflation.
. – Bonds in pesos adjusted for inflation are more attractive than bonds in dollars for the same term, as a result of the fact that the entry of dollars into the country will end up affecting the exchange rate. However, inflation could be at higher levels due to the adjustment of relative prices of public rates.
. – It is very important, for those who wish to finance themselves in the market, to take into account the effective financing rates and their comparison with the expected inflation. In the case of personal loans, it must be taken into account that the VAT burden works against them when it comes to repaying the loan.
. – With current rates, it is better to finance oneself by reducing the stock of merchandise or selling hoarded dollars, rather than resorting to financing that shows very positive interest rates against inflation and devaluation.
.- We see a scenario of a calm dollar until March 2025. The arrival of credits from international financial organizations for US$ 4,000 million, a repo with a gold guarantee for US$ 3,000 million, the arrival of more corporate financing that could amount to US$ 4,000 million, and a probable agreement with the IMF with fresh money, removes the specter of devaluation, brings us closer to a probable exit from the stocks and invites us to invest in bonds, but it seems to us that the time has begun to increase the holding of shares.
Source: Ambito
