On Wall Street, despite the volatility, there has been a recovery since mid-June, both for the S&P 500 indicator and for the Nasdaq 100. At the same time, a 75 basis point rise in the US Federal Reserve States, modifying its level from 1.5% – 1.75% in June 2022, to 2.25% – 2.5% during the end of July, has ratified the entity’s decision to advance its monetary policy, which which raises many questions for investors in emerging markets. In this way, the Buenos Aires Stock Exchange has reacted with an increase that exceeds 20% if it is measured in Dollar Cash with Liquidation (CCL).
Investments: those who turn to fixed income
With this in mind, and consulted by AmbitIOL Inversiónronline proposed some alternatives for investments in the month of August. “In line with what we mentioned regarding inflation, it would be ideal to have the TX23 bond in our portfolio”, he pointed Maximilian Donzelli, Head of Research at IOL Invested online in a report. “This fixed income instrument, which matures in March 2023, continues to be a good option against inflation, which according to the July REM is projected at 90% for the year. Taking this latest projected inflation data, the estimated IRR stands at 93.9% annualized, ”he said. According to the analyst, this investment could have a good performance in the next three months.
Another asset recommended by Donzelli is the Capex Note. This private oil company bond pays interest and amortization in dollars, but the investor can enter the investment also in pesos. This ON is under foreign law and expires in May 2024. It pays coupons semi-annually at an annual rate of 6.875% and has an estimated Internal Rate of Return in dollars of 7.4%. For the analyst, This investment protects against inflation in dollars.
For Diego Martinez Burzaco, Head of Research at the firm Inviu, there is also attractiveness in Negotiable Obligations (even over sovereign bonds) for those more conservative profiles. Although she considers that the prize may become “scant” based on the “macroeconomic maladjustment at the aggregate level”, in any case, she pointed out that “There are companies with an excellent tracks record that provide a robust sense of security for the investor who is not overly risk tolerant”, within them we can find Pan American Energy, Vista Oil & Company and Tecpetrol. As well as for medium risk investments, Burzaco recommends the ONs of Pampa Energía or Arcor.
In the case of sovereign bonds in dollars, Burzaco clarifies that, although they have had a rebound from historical lows, “explained by opportunity purchases and a better external climate”; he also maintains that “prices will be tied exclusively to the success of the concrete progress of the measures that solve the underlying problems” so, if there is an interest in these, it would be an option for those who love risk and speculation.
Investment in equities
On the other hand, for those who want to bet on equities, the CEDEARs are Certificates that are listed in pesos and contain shares from abroad. For all those who are willing to take a moderate risk, the recommendation of the analysts of IOL Inversiónronline is the American company Coca Cola. “It is one of the best assets of the year since it belongs to an item that does not usually suffer in contexts of high inflation, such as the one currently hitting the United States”, affirmed Donzelli; it has even been revalued by 6.4%.
Similarly, there is the proposal of the Berkshire Hathaway’s CEDEAR, a company which acts as a “holding”, so that with the support of subsidiaries it invests in companies from heterogeneous sectors. This investment company is led by Warren Buffet, investor, majority shareholder and executive director of it. It should be noted that, within the recommended investments, are the firm Apple, and the entities Bank Of America and American Express.
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For Donzelli, an option for those seeking to expose themselves more to risk are the CEDEARs that replicate ETFs from other countries. so they seek to reproduce the market for these. In this case, the focus is on the ETF EWZ of Brazil, which seeks to reproduce a set of papers based on the main stock indicator of the São Paulo Stock Exchange, Brazil. This ETF is made up of 49 shares, which have higher percentages of the steel company Vale, but also Petrobras, Itaú, Banco Bradesco, etc. “Since the start of 2022, the EWZ has posted a 9.3% return in dollar terms, significantly outperforming the major New York indices,” Donzelli said.
On the other hand, for those more aggressive profiles with a medium-term vision, “domestic stocks look cheap.” According to Burzaco (Inviu), “There are companies whose market prices are very far from their long-term value in a more normalized country environment”, especially the industry, gas and oil sectors. For this reason, its recommendations include Pampa Energía, Vista Oil & Company, and utilities such as Transportadora del Norte, del Sur or Transener. In the same way, regarding the CEDEARs “it can be very interesting to position yourself in the medium term in companies such as Amazon, Microsoft and Google”, Burzaco stated. Finally, the analyst comments that for those looking to take a little more risk, Meta Platforms could be a good alternative.
Finally, Burzaco ruled that the interest rates for fixed terms are approaching the inflation expected by the market (when one measures them in effective annual rate). Therefore, for very short-term placements, they could become attractive in the near future.
Source: Ambito
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