The S&P Merval index gained 2.5% to 87,876.40 points, after a 3.8% gain on Monday and against a 6.6% loss in the previous five days.
A restructuring of the public debt in pesos, new exchange restrictions and greater tax pressure are the recipes that experts believe that Argentina could apply in the second half of the year to avoid a debacle and meet the goals agreed with the International Monetary Fund (IMF).
The Argentine firm Bioceres has just reported that the United States Food and Drug Administration (FDA) has positively concluded a review of its drought-resistant HB4 transgenic wheat, which it described as a “key step” towards its commercialization in the country.
Bonds and country risk
On Monday, dollar bonds accentuated their debacle this Monday, falling to 7.4%, with parities at new historical lows, in the face of maximum investment uncertainty, which led the country risk to exceed 2,400 basic points without scales, in a day of strong exchange rate pressure in the alternative dollar markets, which set new nominal records, after the tightening of the exchange rate.
The bond market in hard currency thus chained its sixth consecutive day with a clear negative trend, those of this Monday were led by the Global 2035 (-7.4%); Global 2029 (-4%); and Global 2038 (-3.8%). Among the Bonares, the casualties reached 3.2% (Bonar 2030).
“The decline in the market is worrying, buyers do not appear because the indicators of the inflationary economy and the internal political problems grow daily,” synthesized a banking analyst.
Faced with the constant flight of currency, largely due to energy imports, the BCRA had to take measures of new exchange restrictions and thus managed to add some US$250 million to its weak reserves (this Monday the energy import payment remained in the order of 100 million dollars).
“It is difficult to stabilize like this. The BCRA’s measures can help marginally, but they also raise questions about the future. This is also reflected in short-term responses,” the economist and former finance secretary, Daniel Marx, told Ámbito.
For the economist and director of Anker Latin America, Federico Furiase, the tightening of the stocks “was expected” in the face of exchange tension, although he warned that the measure will bring about “less activity” and “more inflation” due to the increase in the cost of replacement of the merchandise
Doubts among investors lie in the improbability that Argentina will be able to meet the quarterly goals recently agreed upon before the International Monetary Fund (IMF) by renegotiating some 44,000 million dollars, through the requirement to accumulate reserves, reduce the fiscal deficit and lower inflation, among others.
“The deterioration of the fiscal numbers, with a deficit of 0.25% of the GDP in May, the expansive monetary dynamics and the lack of accumulation of foreign currency by the Central Bank (BCRA) cast doubt on the fulfillment of the goals with the IMF” They said from Portfolio Personal Investments.
On the other hand, and after the intervention of the Central Bank and ANSES, CER-adjusted securities in pesos rebounded up to 10.1% (TX24) after the strong liquidation in recent weeks. According to market estimates, the BCRA has already issued almost 500,000 million pesos to support the prices of bonds in pesos.
The most relevant increases were recorded by Boncer 2024 (+10.1%); the Boncer 2023 (TC23 +3.6%); and the Boncer 2026 (+3.3%).
“This dynamic of continuous issuance to support the prices of debt in pesos is generating an additional risk in the goods and free dollar markets. Indeed, the magnitude of the issuance is significant enough that it can be potentially very destabilizing in a context of falling demand for pesos”, they warned from Aurum Valores.
Before a key tender for the Treasury that will take place this Tuesday, and after the recent sharp falls in titles in pesos, the president of the Central Bank, Miguel Pesce, promised this Monday to implement a liquidity line as soon as possible of Treasury instruments for use by mutual funds.
“We are analyzing different alternatives so that they work as a reassurance that the BCRA will operate on the curve to guarantee the liquidity of Treasury instruments and the support of their prices,” said Pesce.
The head of the Central met with Valentín Galardi, president of the Argentine Chamber of Common Investment Funds (CAFCI) and representatives of the industry, who agreed with the strategy and valued the intervention of the BCRA in the securities market, sources indicated. the monetary authority.
“Attention continues to be focused not only on the evolution of net reserves towards the second half, but also on the possibility of recovering the appetite for local debt (…) since the auctions are the only voluntary financing available to avoid untimely speed up the pace of monetary issuance in the face of already high inflation,” said Gustavo Ber.
The Ministry of Economy will carry out this Tuesday a tender for treasury titles in which it will seek to cover maturities for some $243 billion. In the last two days, it managed to reduce debt maturities to only 40% of the initial total, after swap operations for $362.5 billion.
Source: Ambito
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