What Argentine actions choose Wall Street banks to have in their wallets before the elections

In a volatile year for local markets, the US investment bank JP Morgan renewed his recommendation of Overcome Argentine actionsconsidering that the fall of the local variable “is not supported by the macroeconomic foundations.” Three months after the mid -term legislative elections, the main Wall Street banks continue to incorporate local actions into their porpholios, But selectively.

So far this year, S&P Merval accumulates a fall greater than 12%. Measured in dollars, the decrease exceeds 19%. The JP Morgan report compares Argentina’s performance with that of other emerging markets. In mid -May, the index MSCI Argentina It was practically stable, while the MSCI Latin America registered a gain of more than 20%. That gap deepened in recent weeks, with a massive sale of Argentine shares that led the higher performance of the regional index to almost a 40% so far this year.

For JP Morgan, this difference “is not justified” if the economic foundations are observed. Consequently, he reinforced his interest in the Argentine market through his model portfolio, which includes papers of Grupo Financiero Galicia (Ggal), Vista Energy (Vista) and YPFand renewed the expectations about these actions it sustains in the last reports.

The most potential actions

For its part, Citi identified Grupo Financiero Galicia (Ggal) As the only Argentine action located in the “attractive” quadrant, by combining a relatively low valuation with good performance. At the opposite end, YPF and PAMPA Energy They were classified as “non -attractive”, due to their little impulse in the market and a valuation that they still consider high.

Meanwhile, papers such as Loma Negra, Banco Macro, Central Puerto, BBVA Argentina and Gas Del Sur conveyor They were located in the quadrant called “Glamor”: companies with strong momentum, but whose prices already reflect a demanding valuation.

Morgan Stanley, on the other hand, also ponders Grupo Financiero Galicia (Ggal) as one of the actions to include in portfolio.

From Wells Fargo, which keeps Argentina as “neutral,” acknowledged that their visit modified its initial perception of the valuation of local financial assets. “Before the trip, we believed that the markets already reflected a fair valuation, and that so that the sovereign espators And the country risk were even more compressed, all change factors should be maintained without interruptions, ”they said at first.

However, after meeting with local analysts and operators, the diagnosis changed. “Almost all interlocutors agreed that Argentina is not yet correctly valued and that the country risk has room to continue going down,” they said in a subsequent report.

Wells Fargo stressed at that time that Investors see in the legislative elections a possible positive catalyst for Argentine assets. According to the analysis, a good electoral performance of the ruling could open the door to new reforms – labor, tax and exchange -, to promote the return of the Treasury to the financing in hard currency and favor an improvement in the country’s credit qualification, by decreasing the political risk component.

In summary, although it was not a good year for Argentine assets, we must remember the deep rally that maintained throughout 2024 where its dollar value shot more than 125%. Legislative elections could be a good catalyst, although with political risksome more “conservative” actions despite its active classOr, they seem to be the most convenient.