“In this (economic) context, it will be difficult for Argentine stocks to prosper in the short term,” Portfolio Personal Inversiones estimated.
On the local news the entry into force of the so-called ‘Import System of the Argentine Republic’ stands out (SIRA), a mechanism by which the Government seeks to restrict the sale of foreign currency. “The new system again compressed the demand for dollars, allowing the monetary authority to absorb the excess available in the wheel,” said Gustavo Quintana, operator of PR Corredores de Cambio.
For its part, the shares of Argentine companies listed on Wall Street operated with most losses. Among the most important decreases are Globant (-5.9%); Mercado Libre (-4.3%) and Banco Supervielle (-3.7%).
Bonds and country risk
Argentina’s bonds fell on Wednesday in a market with select liquidity and apathetic in the face of low investor interest by the growing doubts that are generated about the future of the third largest economy in Latin America.
Declines for dollar bonds were led by Global 2029 (-2.5%), followed by Bonar 2035 (-0.8%) and Bonar 2041 (-0.7%). On the contrary, the Global 2046 (+2.4%) and the Global 2041 (+1.7%) registered increases.
A high inflation projected towards 100% for this year, a large fiscal deficit that hits the country’s accounts and the scarce reserves of the central bank (BCRA), are issues that concern investors.
“The macroeconomic inconsistencies remain and beyond having overcome the implosion of the peso market, and the triggering of the exchange rate gap, the uncertainty about what will happen in the coming months continues.“, said Lucio Garay Mendezfrom the consulting firm Eco Go.
He added that “the market continues to expect a devaluation in the short term, the government continues to unfold and create new exchange rates that only serve to buy a little more time.”
Understanding the Argentine economy requires for many a manual to deal with rampant inflation and some 14 different exchange rates, applicable depending on whether one wants to travel, attend a show or simply buy dollars to save, according to a Reuters report.
Over-the-counter bonds lost 0.9% on average, led by dollarized issues, with some intraday volatility where sales always prevailed.
In that framework, the country risk measured by the JP. Morgan bank, fell 0.04% to 2,797 basis points.
“With an estimated floor (for inflation) at 6% for the next few months, and given the increase in yields, it is preferable to position yourself in letters such as ‘X19Y3’ or ‘X16J3,'” clearing and settlement agent Neix said.
Source: Ambito
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