Sovereign bonds in dollars backed down between 15% and 23% so far this year in the stock market, which triggered the country risk.
The Sovereign bonds of Argentina They are going through one of the worst gusts of recent times, which is why their parities contracted strongly until they were under 50%. Do these values make sense given the current context?
Specifically, the local fixed income titles with foreign law (GD) have a Average 48% paritywhile the values with local law (al) are negotiated with an average parity of 46%.
Bonds fall strongly on the bag
The low parities were reached after the dollar bonds between 15% and 23% will be contracted so far this yearwhich is why the country risk was shot until it was comfortably above 1,400 points, the highest level since August 2024.
For market specialists, investors and operators are providing a quite negative scenario and decreasing positions of Argentina.
“I believe that it responds a little more to the fact that, if we are suddenly touching the exchange rate of the band’s roof and the central bank is selling dollars as agreed with the IMF, the level of reserves decreases and that makes a little nervous to debt holders because, basically, there are less dollars to pay them,” he explained Matthew ReschiniInviu research analyst.
MERVAL BAG MARKETS BONDS ACTIONS
Fixed income is still under pressure
Unfortunately, strategists do not trust that the situation will improve a lot in the short term. For example, Javier Casabalby ADCAP Grupo Financiero, said the bonds could Return to the parities of February 2024before the call to Javier Milei dialogue.
“The longest bonds, such as the GD35, would probably continue under greater pressure. The holders of these bonds will continue to see closely the movements of the Central Bank and the amounts that allocate to intervene,” said the executive.
In general, what is happening is quite clear: The market distrusts the exchange policy adopted and the power that the ruling could have to have in Congress to implement deep reforms that improve the economic situation of the nation.
“Clear signs of macroeconomic stabilization and governance are needed. You have to order the exchange front and show the ability to renew debt would help, but the decisive factor is political: without a horizon that must mark the government, it is difficult for the market to create on a sustainable path and begin to validate higher prices for the bonds,” he summarized Leonardo Anzalonedirector of the Center for Political and Economic Studies (CEPEC).
Source: Ambito
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