Strong gains in fixed income dollar instruments were led by Global 2035 (+4.4%); Global 2038 (+3.2%); the Bonar 2038 (+2.9%); and the Bonar 2041 (+3.9%). Throughout the week, Argentine globals accumulated strong gains of up to +6.2%, and the average rate fell below 20%.
“It seems that the definitive signing with the IMF and the end of the negotiation on the agreement are approaching. Investors are waiting expectantly for this to work as a direct driver of the market, because, for the moment, the variants of advocacy are around it”said Ayelen Romero of Rava Bursátil.
Despite this week’s rises, most dollar bonds are still in the red between -0.1/-4.9% so far this year. On this last point, the exception is 38, which is in positive territory with +1.3%. The reason? “Its higher current rate in the first years makes it attractive compared to expectations according to the IMF,” they commented from PPI.
The two sides have been in winding talks for more than a year to renegotiate a failed $57 billion loan agreed in 2018 by former President Mauricio Macri. “We keep working. No news is expected over the weekend. And of course it’s getting closer and we have to be vigilant next week or the following one”, a government official with knowledge of the negotiations told Reuters.
In this framework, the director of the Western Hemisphere Department of the International Monetary Fund (IMF), Ilan Goldfajn, He maintained that the agency is “very close to the Argentine authorities to reach a complete agreement,” when presenting this afternoon before businessmen and economists in the region. Goldfajn, who took over from him at the IMF last month, spoke about the prospects for Latin America at a virtual conference by the Council of the Americas.
“We have intense meetings, many virtual, and that takes almost 24 hours a day, seven days a week,” The Brazilian economist and former head of the Central Bank of his country explained. “When we finish we send it to the board of directors and they will say what they will say; we must take into account the reality of Argentina; it is a realistic and reliable program that is only for Argentina in the broadest sense, this is a credible program, so pragmatic and feasible”analyzed.
In the peso segment, meanwhile, Inflation took all eyes after the January CPI stood at 3.9% and registered the highest monthly volatility since April 2021. Thus, forward inflation expectations remain on the rise (with peaks of 4.1/4% in March/April).
Therefore, price coverage remains firm and this was reflected this week in the Mutual Funds industry, with growing flows towards the CER adjustment. However, operators paid attention to the Badlar adjustment, with a market that had already been discounting the new BCRA rate hike, aimed at slowing down inflation and stabilizing the financial exchange rate.
In that sense, CER-adjusted peso bonds rose an average 0.2% in the short tranche, and 0.5% in the medium and long tranches. In the week, adjustable rates rose 0.5% on average in the short section and 1.9% in the rest of the curve.
Meanwhile, the dollar-linked sovereign curve ended the week with a rise of 0.3% for TV22, without changes for T2V2 and a drop of 0.2% for TV23, according to a report by Grupo SBS.
Stocks and ADRs
Among the actions, however, the geopolitical tensions between Russia and Ukraine weighed. Fears of a Russian attack kept investors on edge. Ukrainian government forces and pro-Russian rebels reported an increase in shelling in eastern Ukraine for the second day in a row, an escalation that Washington and other Western allies say could be part of a Russian pretext to invade.
Thus, the leading S&P Merval index took a break due to taking profits and remained in a negative position of 0.6%, at 89,443.19 points, in line with the stock market weakness of external markets, but also as an effect of the strong decline of the CCL dollar.
$5,665 million in equities were traded, highlighting the performance of Transportadora de Gas del Norte (+8.3%) and Transener (+4.3%).
In the week, the leading panel rose 1.4%, with a clear winner: Cablevisión jumped 25% in the last 5 days, after the Supreme Court of Justice decided to reject the CNV’s request for the company to modify the price of the takeover bid for Telecom Argentina (TECO2) to a price of USD 4.8658 -which would have been detrimental to CVH, since Telecom price is USD 2.14-. “The trial is concluded and CVH could go to find the area of $950/$1,060 to be able to arbitrate with TECO2, which would imply an additional rise of 25%/39%”, they projected in Cohen. Ester Friday, the paper of Cablevisión closed at $784.50.
On Wall Street, for its part, the ADRs showed almost the same amount of rises as they fell. Among the gains, those of Grupo Supervielle (+4.3%) stood out; and those of Banco BBVA (+3.9%), while the losses were again led by Mercado Libre (-8.2%), which has already accumulated a drop of 17% in the month, and 30% in the year .
Continuing with the geopolitical conflict at the center of the scene, the US published that Russia, despite having argued that it has no plans to attack, It has carried out the most important military mobilization since the Second World War, increasing tensions in the area and especially in the financial markets. President Vladimir Putin urged Kiev to negotiate with the separatist leaders, but they refused to do so.
In this way, the S&P500 ended the day with a drop of 0.7%, accumulating a drop of 1.6% in the week. The 10-year bond fell 3 basis points to 1.93%, while oil fell 0.3% to $91.51 a barrel.
Source: Ambito
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