Known on Tuesday the inflation data for April (8.8%), The Central Bank (BCRA) ordered another cut in the reference interest rate: cut it by another 10 points, up to 40% annually, which drives a new rearrangement of the market in terms of investments.
Fixed terms, which had already been offering negative real returns, now reinforced this trend and most banks adjusted the rate to around 30% annually, which is equivalent to 2.5% monthly, far from 5% or 6%. % of inflation projected for the month of May.
In the statement about the rate reduction, the BCRA also explained that “resumes its discretion to intervene in the secondary securities market, until now limited by predetermined prices in the regulations (2% spread).” That is, from now on the monetary authority will no longer have the spread limit of 200bps on the rate of the last Treasury tender, but can operate at any rate level.
In addition, The Treasury announced a tender for Lecap, with minimum rates above the TEM of the monetary policy rate, in addition to bonds tied to the CER and the official dollar. “With this, we believe that the Government shows its intention for the market to begin to move with a little more speed from remunerated liabilities of the BCRA to Treasury securities, a key issue to clean up the balance sheet of the BCRA”commented Juan Manuel Franco, Chief Economist of Grupo SBS.
MEP dollar
In relation to the impact of the lowering of BCRA rates on the CCL or MEP dollar, the market understands that what rules is the flow, so the focus It should be more about the liquidations of agricultural exportswhich have increased so far in May.
After the rate reduction, “the attractiveness of staying in T+0 or T+1 funds is much lower, which is why, as we are seeing now, parallel dollars are experiencing a strong rise, beyond the fact that underlying assets such as ADRs and foreign bonds also rise,” stated Mauro Carrizo, Financial Advisor at Cocos Capital.
As historically happens, the second semester is usually more conducive to the dollar being the winning variable, therefore, “buying the MEP dollar can also be A viable alternative for those who prefer not to be exposed to instruments in local currency”said the Cocos Capital analyst.
LECAPS
“We believe that the lowering of BCRA rates, together with minimum Lecap rates above, will make these securities attractive and we consider that the Treasury could cover the maturities given this rate incentive. The intention going forward seems to be to recreate a fixed Lecaps rate curve, although we reiterate that demand is conditioned by the existence of the strict exchange controls that still persist”Franco considered.
This new scenario “it presents various investment alternatives, but for those who want to continue betting on carry, Lecaps today are the best option, with monthly rates between 3 and 4%,” Carrizo assured.
CER Bonds
Faced with this complex panorama, where having pesos without investing generates losses of purchasing power of great magnitude, IOL Investonline Research considers that position in CER (inflation-adjustable) assets, since they represent the best option to protect value against inflation considering low-risk fixed income assets and in the face of a Possible change in exchange rate policy in the medium term.
Below, they listed some alternatives that can be useful to boost savings, while also protecting your capital against rising prices in the Argentine economy.
– Short term -180 days (CER T4X4 Bonus): Inflation-adjustable bond (CER index) maturing on October 14, 2024 (150-day term). An annual return of 66% is projected, which is equivalent to a monthly return of 4.25%, above the return of a fixed term.
– Medium term +180 days (CER TX26 Bonus): Inflation-adjustable bond (CER index) maturing on November 9, 2026 but amortizable in five installments beginning this year. It currently yields CER-5%, which means that in monthly terms it pays inflation from the previous month -0.4% monthly, so it is expected that in one month it will yield 7.8% monthly, far exceeding the fixed-term alternative.
Argentine stocks
The balance sheet season has closed for most of the S&P Merval, leaving Mirgor and the banks pending. “The results were mixed between the different companies, but distinctions are observed between sectors. For example, materials companies (metallurgy and cement) suffered from the collapse of the sector’s activity. Companies with little sensitivity to the local cycle and dollar fundamentals linked, like the oil companies and Central Puerto, did manage to translate the exchange improvement into higher income”, pointed out from Delphos Investment. For their part, regulated companies suffered the inflationary flash at the beginning of the year, but will reflect the new rate tables starting in the second quarter.
Although the last rounds were characterized by a lot of noise and high volatility, some international leaders that showed financial support to Argentina, although the back and forth in local aspects such as the treatment of the Bases Law, the RIGI, the discussions between the generators and CAMMESA, the YPF expropriation trial and the oil company’s balance sheet, cast a pall of uncertainty.
Despite everything, Delphos Investment maintained their preferences within the local panel. “We continue to bet on the new management of YPF, on the growth of Pampa, on the solidity of Central Puerto which, per unit of power and in relation to the region, is trading at attractive values, and on the operating leverage of TGN after the 675% tariff increase. %”, they remarked.
Source: Ambito
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