Dollar bonds extended their positive streak and country risk hit a one-week lowthis Wednesday May 3, one day after the Government restricts operations of bonds in local currency with settlement in dollars to decompress exchange rate pressures. The S&P Merval, meanwhile, fell for the second day in a row.
Thus, in the fixed income segment, debt in foreign currency closed with the majority of increases led by Global 2038 (+2.9%); they followed him Global 2035 (+2.4%) and Global 2046 (+1.4%). In that framework, Argentine country risk fell 3.4% to 2,566 pointsits lowest level in three weeks.
What drove the performance of the bonds? According to PPI, the BBG Emerging Market and the EMB ETF (composed of emerging debt), marked an increase of 0.4% and 0.4% respectively, which suggests that the external climate for the EM debt universe appears not to be negative.
“Taking into account that bonds in local dollars are approximately 55.3% explained by foreign fundamentals, it is expected that the behavior of international screens infects the local performance” the report added.
but also from Personal Portfolio Investments explained that “this appetite for securities with more robust clauses implies that investors seek stronger legal frameworks to the extent that the macroeconomic context becomes more complicated”.
Shares and ADRs
The stock index S&P Merval lost 2.6% to 288,007.9after reaching a record high of 307,057.03 points recorded last week as inflationary and devaluation hedge. The biggest casualties of the leading panel were for Aluar (-6.4%), Transportadora de Gas del Norte (-5.6%) and BBVA bank (-5.2%).
Learn more – Follow the price of the blue, official, CCL and MEP dollar in Argentina
“In the midst of a difficult economic situation and with a lot of volatility, the stock market confirms a short-term correction after reaching all-time high levels exceeding 300,000 points”, said Mauro Natalucci from Rava Bursátil.
On the other hand, the energy holding company Pampa Energy issued Negotiable Obligations (ON) for a total of US$82.7 million. “An ON in foreign currency at a fixed rate of 4.99% has the objective of improving its maturity profile and a new green bond in pesos to finance the construction of the Pampa Energía VI Wind Farm,” the company explained.
In the international framework, the Federal Reserve decided to raise interest rates from 5% to 5.25%, an increase of 0.25 basis points. The New York Stock Exchange fell after Fed Chairman Jerome Powell announced after a decision that he ruled out cany cuts in the short term. The index The Dow Jones lost 0.8%, the Nasdaq fell 0.5% and the broader S&P 500 index fell 0.7%.
In this context, the ADRs closed with the majority of losses. The main ones were Transportadora de Gas del Norte (-2.8%), BBVA bank (-2.4%), and Irsa (-2.4%)
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