Shares of the S&P Merval sank as much as 8%; bonds, with majority of losses and strong volume

While the market kept its eye on the evolution of the financial exchange rate, the Sovereign hard currency ended mostly in negative territory, with declines led by Global 2035 (-2.8%); Bonar 2029 (-1.7%); and Bonar 2041 (-1.2%). On the contrary, they ended with increases the Global 2046 (+1.2%); Bonar 2038 (+0.7%); and Bonar 2035 (+0.2%).

Among operators, the volume traded in the fixed income segment drew attention. “Interventions were intensifying to continue keeping regulated financial dollars calmer, but the volume was higher than usual,” commented a market operator to Ambit.

In this context, the Argentine country risk rebounded 0.2% to 2,572 points, after touching the lowest level in more than two weeks (2,555 points).

The market remained attentive to news regarding a eventual further relaxation of goals and faster disbursements of the agreement with the IMF. “Negotiations with the IMF continue to recalibrate the (current) agreement and eventually achieve advancement in the disbursement schedule for the second semester while continuing to finance imports from China through the ‘swap’ between central banks”Delphos Investment said.

Along with speculative rearrangements of portfolios, Starting this week, the government restricted operations of bonds in local currency with settlement in dollars to decompress exchange rate pressures.

The BCRA had to sell 18 million dollars of its reserves to meet the needs of the market. In the first days of May, the bank accumulates sales of 276 million. The special exchange rate for agricultural producers, at 300 pesos, fails to meet settlement expectations due to price differences between supply and demand.

“Operators remain concerned about the continuous drain on reserves. So the arrival of foreign currency is urgent, either through an acceleration of the ‘agricultural dollar’ based on incentives since it is slow, external financing or reorganization of disbursements and payments to the IMF, since interventions and regulations only buy time”said the economist Gustavo Ber.

The dollar in the futures markets operated with marked drops to $294.45 for July and $528 by the end of 2023, with volume dynamics, market agents agreed. These futures are “relaxing prices a bit because the market begins to see the plan arrive (to the presidential elections in October without shocks) a little more feasible,” commented analyst Salvador Vitelli.

Separately, the Federal Reserve raised rates by a quarter of a percentage point on Wednesday, signaling it might pause to give time to assess the consequences of recent bank failures, wait for the resolution of a political standoff over the cap on US debt and monitor the course of inflation.

For their part, dollar-linked sovereign bonds closed with average increases of 0.9%, concentrating the volume in Q2V3. Meanwhile, the duals gained an average of 0.4%, with good volume in TDF24 (+0.6%).

Finally, CER bonds showed good demand and ended with average increases of 0.8% in the short leg and 0.9% in the long leg of the curve.

S&P Merval and ADRs

After climbing almost 22% in April, the leading index BYMA’s S&P Merval posted its third consecutive decline, losing 2.5% to 281,752.49 points, in a stock that was affected by the global negative trend due to an increase in risk aversion. In the first three days of May, the leading panel accumulated a decrease of 5.4%.

The papers that fell the most were those of Aluar (-7.8%); Ternium (-6.8%); and BYMA (-2.6%). Meanwhile, the only shares that rose were those of Cresud (+6.2%) and those of Comercial del Plata (+0.3%).

For their part, the Papers of Argentine companies listed on Wall Street registered falls of up to more than 5%. The podium of the greatest casualties was made up of Free Market (-5.2%); Take off (-4.2%); and Grupo Financiero Galicia (-3.3%).