The sharp rise in inflation, which could exceed 80% this year according to private estimates, high fiscal spending and tensions in the ruling coalition, are the main factors analyzed by investors.
In tune, the country risk prepared by the JP.Morgan bank rises 14 basis points to 2,785 unitscompared to a historical maximum level of 2,824 basic points and a value of 1,083 units marked after the debt restructuring carried out in 2020.
“The strong and everyday news continues to be the dollar that does not seem to have a brake. Faced with an uncertain economic roadmap, the greater reaction to get rid of the local currency and seek coverage continues to convulse the exchange rate that does not find a ceiling, or specifically depreciating the peso against the US currency,” said Javier Rava of Rava Bursátil.
The new Minister of Economy, Silvina Batakisfails to reassure the market despite the announcement of new economic measures and the ratification of the agreement reached with the International Monetary Fund (IMF).
“The uncertainty in the local situation is increasing and is quickly transferred to the prices of our market“, said Javier Rava of Rava Bursátil. “The market is unstoppable. If there are no sellers, the market has no top in sight,” said one trader.
The heavy obligations to face energy payments prevent the monetary entity from increasing its reduced reserves with purchases of foreign currency from the market at times of settlements in the agricultural sector. Operators estimate that so far this week the BCRA got rid of some 300 million dollars from its coffers.
“There is” a lack of interest in Argentine risk. If we look at the annual performance of bonds in dollars, we can see declines of 40% in hard currency. Which represents a real punishment for the investors who entered the restructuring,” concluded the clearing and settlement agent Cohen.
S&P Merval and ADRs
In the same context, the S&P Merval stock index took off 2.7% to 109,863.97 points, after closing down 0.22% on Wednesday. The Merval accumulates a rise of 31.97% so far this year, a level similar to the accumulated inflation in the same period.
On Wall Street, Argentine papers trade with majority of decreases of up to 5% led by YPF and financial institutions Banco Francés (-3.8%), Banco Macro (-3.6%). The only outstanding increases correspond to IRSA (0.9%), Loma Negra (0.2%) and Globant (0.1%).
Source: Ambito
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