ADRs fell up to 4.7% and dollar bonds fell this Tuesday despite the boost they received after a new tweet supporting the Government by the US Treasury Secretary Scott Bessent and the rebound they experienced near the close of the round on Monday, after the start of negotiations to debt buyback sovereign.
Dollar titles closed with a majority of losses in Wall Street led by the Bonar 2029 (-1.7%) and lost up to 2.% locally thanks to Bonar 2041. Thus, the country risk measured by JP Morgan remained above 1,000 basis points (bp), after closing at 1,048 bp last Monday.
The economist Gustavo Ber remarked to Scope that although the bonds started firmer in the morning, caution prevails among operators during the day, as seen in previous rounds.
Portfolio dollarization continues to dominate the financial market scene Argentina as a prelude to the legislative elections next Sunday, where the Government will seek to add seats in Congress in the face of the current minority in both chambers.
The explicit support of the government of USA “It served to calm the markets and temporarily remove doubts about the sustainability of the economic program, but the progress of economic activity seems to have been linked to the electoral result that the Government obtains in October,” reported the consulting firm Orlando Ferreres & Asociados.
This Tuesday, Bessent assured in X that the administration of donald trump works to “stabilize and secure the Western Hemisphere”, while an “economic stabilization agreement” was signed with the Central Bank (BCRA). “Our stabilization agreement is a bridge to a better economic future for Argentina, not a bailout”he added.
Likewise, the Argentina announced the day before that it began negotiations to develop a sovereign debt buyback aimed at reducing the country’s financing cost and strengthening investment in education. This operation “is part of the swaps called ‘Debt for Development’, which may be focused on health, nature, climate, education or other development objectives of the countries.
These exchanges are intended to “free up fiscal resources of the countries in exchange for commitments from the debtor countries to invest in some of the aforementioned areas,” said consulting firm 1816.
Meanwhile, a group of US banks, including JP Morgan Chase, Bank of America and Goldman Sachs seek guarantees and endorsements to set up a relief fund between private parties to lend another US$20 billion to the southern country, the Wall Street Journal reported after consulting people familiar with the matter.
ADRs and S&P Merval
At the local level, the leading index S&P Merval rose 1.2% to 2,002,848.510 points, while its counterpart in dollars sank 1.6% to 1,240.38 points following a 2.80% rise in the Dollar Counted with Settlement (CCL) at $1,614.71.
The shares performed with a majority of increases, led by Aluar (+3.9%); Supervielle Group (+3.8%); and BBVA Argentina (+3.5%). Meanwhile, the ADRs They ended with a majority of casualties: Telecom Argentina (-4.7%); Central Port (-4%); Edenor (-2.4%).
In this regard, Ber maintained that It is possible that the majority of investors “incline towards a more cautious stance” towards Argentine assetswaiting for the post-election political panorama, and with a dollar that this Tuesday once again tested the band’s ceiling.
At the same time, the specialist understands that as long as there is a positive reading of 26-O by the market, it can remain valid “the expectation of a modification in the exchange regime towards a freer one that allows reserves to be accumulated”.
Source: Ambito
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