Dollar bonds operate with a majority of increases this Wednesday, November 8 in the Buenos Aires stock market, waiting for the presidential runoff on November 19 where they face each other Sergio Massa and Javier Milei.
The most notable advances of the day are led by the Bonar 2038 (+2.5%); Global 2038 (+1.8%), and the Global 2035 (+1.4%).
The firmness of “EM bonds (emerging bonds) could lead to a more pronounced rise in Argentine sovereign bonds, of around 15%, once the uncertainty of the elections begins to clear up,” indicated from Adcap Grupo Financiero.
In that framework, the risk countryprepared by the bank JP Morgangives 0.5% to the 2,476 basis pointsnew two-week low.
The fixed income market operates cautiously as investors cannot foresee a possible political and economic direction for the country just days before a close presidential election.
Next Sunday the 19th, the current Minister of Economy, Sergio Massa, defender of the peso as currency, and the ultra-liberal Javier Milei, who aims for dollarization and the elimination of the Central Bank (BCRA), will measure their strength at the polls to assume the presidency.
“The attention of investors is focused on the electoral signals. While Milei insists on dollarization and closing the BCRA, there is a lack of certainty that generates a lot of concern in the market. Meanwhile, Massa had some definitions about how the rate will move of exchange after the runoff”, they said from Portfolio Personal Investments (PPI).
“But we believe that in the next fifteen days there will be a lot of political noise that will generate high volatility in the face of the runoff, resuming the dollarization of many investors’ portfolios”they added.
Recent opinion polls show an increasingly tight race between candidates who offer polarized visions for the country.
Recently Massa said that on November 15, before the second round of elections, the official exchange rate will rise three pesos and the crawling peg will be applied again.
In the market there are more doubts than certainties about the speed with which the “crawling peg” will be applied again. “We consider that economic adjustment measures will be taken after the elections, being lighter and more predictable if the ruling party wins and more intense if the liberal party wins”they maintained from Invertironline.
“It is worth mentioning that we are faced with two binary scenarios, where we will also no longer have a window of time until the next electoral round, so the chosen candidate will develop his policies, where perhaps his actions do not correlate with campaign speech, so it is prudent to maintain some exchange rate coverage,” they added.
Bonds in pesos
For its part, the debt in pesos operates with a majority of declines. Among the bonuses CER, CUAP gives up 2.9%; he DIP0, 0.9%, and PAR0, a 0.9%.
Meanwhile, the dollar linked rise: the T2V4 earns 1.4%, and the TV24 advances 0.3%.
S&P Merval
The leading stock index S&P Merval fell 2.4%, to 595,851 units, which fails to recover ground despite its attractive values. The leading panel accumulates an improvement of 194% so far this year, compared to an inflation estimated by analysts of 180%.
Source: Ambito
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