Bond investors closely follow the results of the legislative elections to make decisions and build strategies.
In recent days, the weighted average price of sovereign bonds backed up until lower level of the year. According to some investors, the reason could be the strategy of the Central Bank and the Treasury that could impact the capacity of payment of the State. However, specialists agree that The key is in the elections.
Punctually, the Secretary of Finance Pablo Quirno He confirmed that the Treasury will use the capital achieved with the fiscal surplus to intervene in the change free market (MLC) and sell dollars, which would increase the offer and, therefore, would reduce the currency contributions.
One of the theoreized consequences would be that The State would have a lower back to face the millionaire matics linked to sovereign debtwhich would have harmed bond prices. But the reality is that large investors and operators are directly observing the political situation.
Bond investors focus on elections
The price of sovereign bonds is not directly linked to the government exchange intervention, in this case absorbing pesos. Remember that “the government, perfectly, as a central bank can do, can intervene in the market and make a profit,” he said Mariano Sardánsdirector of FDI Patrimonial Management.
“Let us remember that the government was buying those dollars to much lower quotes, which would be making a difference in large pesos. There is no issue of bond prices falling with respect to the intervention. The issue of bonds It is more product of political noise than on Tuesday’s announcement “, added.
Dollars
According to the Executive, many Argentine clients with bond positions are concerned about the results of the legislative elections, both this Sunday and October. The reason is clear: You have to win the ruling party so that there is a revaluationand the last political scandals played him against the government of Javier Milei.
Waiting for a victory of the ruling party
“If the ruling party loses for less than four points or even wins the elections, the sovereign bonds estimate that they would react positively. Perhaps, having as much volatility and not being a definitive choice how the October elections would be, we cannot say exactly where we think prices would go, but we do believe it would be positive, “he said Rocco AbalsamoFinancial Advisor in Cocos Gold.
For their part, analysts of Investment Profession They detailed that, in a positive scenario, there should be a Standardization of the bond market in pesos, with rates descending after months of stress, considering that more than a month would be missing for national elections.
“This relief in rates could also favor the recovery of the activity, stagnant in recent months, giving greater impulse to government support. The dollarizing pressure could be relieved, although it would not seem that the exchange rate has a lot Well the choice that matters is that of October, a triumph in September should return the optimism that vanished in the last month, “they summed up.
Source: Ambito
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