During this day, the S&P Merval rose 5.5% and bank stocks jumped up 14% by the hand of supervielle bank, they also rose strongly Galicia Financial Group (+12.7%), Macro bank (+12.6%), and BBVA bank (+12.6%).
Mauro Mazza, Bull Market’s Head of Research, in dialogue with Ámbito confirmed this information. “Today’s increase is linked to comments and a relevant fact from Itaú that says Banco Macro’s intention to buy their business unit in Buenos Aires. These purchases always generate revaluation processes“.
“In fact, some suggest that if locals buy it is because they see business in the future, the question is why Brazilians did not wait for 2024,” Mazza opined and expanded his vision of this movement: “Banco Macro is buying a problem, more than 200% of Itaú’s equity is exposed to BCRA Bills and Sovereign Bonds. Although it is a small portfolio of assets, less than 200 billion pesos, the reality is that the bank’s exposure to the State will increase.”
The head of Research at Bull Market also said that “the market began to pay Book Value and not so much ROE of the businesses that is on the ground” and considered that the banking sector is trying to return to the highs that occurred during the bond buyback launched by the Minister of Economy, Sergio Massa.
Another factor he named was the debt swap. “It is practically all indexed to Dollar Linked and CER, which gives certain security to the sector on the portion of the assets exposed. We are concerned that the bonds do not accompany and everything is an equity movement. Banks are the sectors most sensitive to the sovereign risk premium, and seem to be ignoring it for now. At some point, investors will have to consider whether to pay Book Value or ROE,” Mazza closed.
Juan Jose Vazquez de Cohenin dialogue with this medium, also linked the rise in the financial sectoron the one hand to the debt exchange in pesosand on the other, to Banco Macro’s intention to acquire the Itaú business unit.
“They are partly responding to the strong rise that has been taking place in sovereign bonds. It has always happened when debt swaps in pesos have been announced. The perspective is that it will be a good exchange and the short-term maturities will be ‘rolled’, mainly given the holdings that the public sector has. And subject to this is what remains with the private sector. This has helped to decompress the fear that exists in the fixed income market in pesos, which is the one that most affects banksVazquez explained.
According to the analyst, This fear of the banks has to do precisely with all the exposure to the public debt of both the Treasurywhich is practically similar to the average net worth of banks, plus the debt they have from the Treasury for financial reservesthat in this way the laces are renumbered in part of the tenure, and also for the whole the stock of the elixir and passes that they have with the Central Bank.
“Practically the financial system is in a situation of two and a half to one holdings with the public sector on net worth, with which any variation in risk, country or the price of bonds played in its favor”Vazquez explained.
Finally, he opined: “This news of Itaú bought by Banco Macro and all dividend payments authorized by the Central Bank to pay to the banks that this helps but it will depend on what happens in the future with what is the sovereign debt”.
Source: Ambito
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