The market foresees double devaluation after the elections: which assets offer the best coverage

The market foresees double devaluation after the elections: which assets offer the best coverage

The Government anchored the official exchange rate at $350 until the general elections, but projections foresee two exchange rate jumps for the end of the year. With galloping inflation and a stagnant reference rate, it is Ambit It was proposed to analyze with experts various strategies to reach the end of the year “covered” and not be left with the pesos in hand.

Let’s review the status quo. The general level of the Consumer Price Index (CPI) rose to 12.4% in Augustand the consultants project that In September inflation will not drop below this level. In this context, the BCRA decided to maintain the reference interest rate at 118% per year, which implies that Traditional fixed terms will pay 9.8% monthly.

Regarding the dollar, the Minister of Economy, Sergio Massa, predicts that In December the wholesale dollar rises to $367, as determined in the Budget. However, the market discounts two strong exchange rate jumps beforehand. According to future dollar contracts, in November the exchange rate will be $477.1, and in December it will jump to $630. Regarding the REM published by the BCRA, the dollar will be located at the end of the year $510.

Devaluation and investments: what to invest the pesos in

The chance of a post-election exchange rate correction remains high (October 22 first round or November 19 ballotage), we recommend build coverage for the exchange rate jumpeither with sovereigns for parallel, stocks, or dollar-Linkedwhich seems to be the best alternative in a 6-month horizon, where the interest rate will surely lose“said economist Fernando Marull in a report.

For its part, in dialogue with Ambit, Diego Martínez Burzacocountry manager of Argentina Inviusaid that “if the coverage is against a rate of a discrete jump in the official exchange rate, the most advisable thing is obviously dollar-linked instruments.”

The analyst recalled that, prior to the PASO, these instruments rose a lot and that, during the following days, they fell because there was a massive exit. “The way to be covered against a possible depreciation of the exchange rate is to position yourself before what you think is going to happen”said Burzaco and assured that “A smart way to do it is through Common Investment Funds that invest in these instruments.”

“Another way are instruments that adjust for inflation. Now you have to always keep all this in mind, the possibility of diversification and that, from our point of view, The Common Investment Fund, if it has both a mix of public risk and private risk, improves the profile of that coverage“Burzaco closed.

For its part, Eugenia de Irureta, head of research at Bavsain dialogue with Ambit He said that for investors seeking coverage from devaluation, “dollar linked instruments allow them to follow the price of the official dollar. There are alternatives issued by the National Treasury (such as TV24) and corporate optionsranging from bonds issued by well-known companies (such as YPF, Telecom and Vista) until small and medium enterprise promissory notes (which may even be guaranteed by an SGR)”.

Are there options in variable income? for Irureta if there is. “Also There are alternatives for local actions that provide some coverage to the devaluation to the extent that it is a company that They export a large part of their production and, therefore, they have a large proportion of their income dollarized. Such is the case of Ternium and Aluar“, specified the head of research at Bavsa.

Options to beat inflation

The IOL Investonline Research team considers that positioning in CER assets and in some assets that adjust for devaluation represent the best option to protect value against inflation. For the short term they suggest investing in the National Treasury Bill X23N3 that adjusts capital by CER, thus managing to overcome inflation

For the medium term they recommend the national T2X4 Bonus that adjusts capital by CER. Also thinking about the medium term, they consider having a position in the TV24 National Bonus linked to the US dollar, thus creating coverage against devaluation.

“Finally, and thinking about an aggressive investor profile, who is also interested in investing in variable income assets, we consider that it would be a good idea to hedge against inflation by buying shares of Pampa Energía (PAMP)”they specified from IOLinvestonline.

Source: Ambito

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