“We understand that from the outcome of the elections, power in Congress will be more balanced. Therefore, we believe that the main political forces are more likely to be willing to advance agreements that provide greater predictability. In this sense, we estimate that the new scenario is more favorable to advance an agreement with the IMF “, expressed Santiago Ruiz Guiñazú, equity sales trader of AdCap.
What was observed in the last rounds is that private papers rose in time with the polls that heralded a result in favor of the opposition. Last Friday, the Buenos Aires stock market fell due to profit taking while waiting for the generals. In this sense, Maximiliano Donzelli, Head of Research at IOL Invertironline made a difference with respect to what happened on September 12: “Before PASO, the market had a rise of almost 30% in pesos and 22% in Dollars. If one analyzes the shares on the Friday before the STEP and the Friday before the generals, the peso rose 15% but in dollar it has almost the same value. What we see is that beyond the result that was very good in the opposition and that it would be more “pro-market”, the market did not validate that result and gave it a label of doubt. We are a long way from a rally. ”
The vote supported the result of the primary election that caused a reorganization in the government. Late yesterday, the president Alberto Fernandez He took a conciliatory tone and agreed with the main political parties, something that brought tranquility. “What happened yesterday with the elections took a variable out of uncertainty because there was very little chance that the result would turn around“added the analyst.
“The relative strength of Argentine stocks on Wall Street presage very moderate optimism, while bonds suffer from the skepticism of being a partner in a state with a growing fiscal deficit. Prior to the elections, we presented our advisers with three possible scenarios ahead of time. to the elections. By virtue of the results, what we considered the base scenario was verified, which implied a trend of repetition of the results of the PASO with some nuances, “he added Diego Martínez Burzaco, Head of Research and Strategy at Inviu.
What were the nuances that were expected? the ruling party managed to recover part of the disadvantage in the Province of Buenos Aires and at the national level, the opposition expanded the advantage, achieving a greater balance of power in Congress. The government has two years to complete its mandate and the questions begin.
Looking ahead to the next few months, Ministry of Economy He has before him the approval of the 2022 Budget and the agreement with the International Monetary Fund (IMF) that will force him – with greater weakness in the face of the opposition that is victorious – to make decisions regarding the fiscal balance. The government of the Frente de Todos must agree – especially in the Senate of the Nation – with the opposition to achieve the “social pact” necessary to guide what will be at least the next ten years in Argentina.
Prospects for the future
After a clear message at the polls to the ruling party, news is expected in the short term. They recognize that the current dynamics is not sustainable in the long term and that is why solutions are needed to avoid that Argentina is complicated in terms of reserves and increased inflation. The “radicalization” that was expected of the government, finally did not happen. With the announcement of a “multi-year” economic plan, the first movements at the level of the markets according to I invite will be:
- The stocks could have a slight positive bias.
- Bonds, with some demand after Alberto Fernández’s speech where he indicates the intention of seeking an agreement with the IMF.
- Dollar: smoothly and perhaps with some marginal understanding between the CCL give way and the MEP dollar.
- Market operations flow on average, smoothly.
On the ADR side, from Invest Online They highlight that the actions that will have a positive path today will be those related to energy companies and banks: Pampa Energía, Edenor, BBVA, Galicia and Macro.
Adcap adds that the most prominent will be on the side of Pampa Energía and Macro: “In the case of Pampa, the company participates in the entire energy matrix of the country. We believe that it will continue to benefit from the incentives of the gas plan, as well as the wholesale electricity supply contracts, known as PPAs, which are denominated in dollars but payable at the official exchange rate. “
“In the case of Banco Macro, the stock has been lagging behind the average of its three competitors and has a high excess of capital, low arrears and low leverage, which will allow it to have more muscle to lend in a scenario of recovery of the demand for credit in the country “.
In conclusion, the unknowns from now on are centered on two key factors: the agreement with the International Monetary Fund and what the movements will be like from now on in the exchange market.
Source From: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
