Bonds in dollars and ADRs do not find a floor and fall up to 5%: country risk exceeds 1,400 points

Bonds in dollars and ADRs do not find a floor and fall up to 5%: country risk exceeds 1,400 points

The dollar bonds and Argentine stocks They can’t find a flat on Wall Street this Thursday, May 23, in the middle of the exchange rate instabilityof the last days, that led the blue dollar to touch $1,300 on this day. In this framework, the risk country rise again and exceeds 1,400 basis points, in the face of political tensions that the Government seeks to minimize.

Under this scenario, the Buenos Aires stock market showed caution along with the arrival of corporate balance sheets, mainly banking, due to its impact on business, and the S&P Merval yields 2.2% to 1,528,672 units.

The local square moved in tune with the Argentine ADRs listed in New York which fell up to 4.9% led by banking papers such as BBVA, Supervielle Group (-4.8%), Galicia Financial Group (-3.8%), Macro Bank (-3.4%), and. Also, they only go up Edenor (+1%); and YPF (+0.8%).

Operators agree that The rearrangement of stocks and bonds is in line with the recent maximum prices achieved, while Congress delays the treatment of two laws considered crucial by the administration of libertarian president Javier Milei.

It is expected that a ruling will finally be reached this week in the Senate so that the discussion on the Bases law and the fiscal package can advance, which support strong economic deregulation.

The economy is suffering a recession and rampant inflation of almost 300% annually, which has been decreasing due to the slowdown in activity along with an increase in poverty and destitution.

“The changes that Milei is fighting for are very abrupt for what the average Argentine is used to,” remarked economic analyst Marcelo Rojas. “That is why, when there are delays in the march that the president encourages, the markets make a temporary pause with readjustments like those observed at this time,” he said.

Economic activity (EMAE) contracted 8.4% year-on-year in Marchhit by the brakes in most productive sectors, to accumulate a drop of 5.3% in the first quarter of 2024.

The presidential spokesperson Manuel Adorni said in his daily press conference that “believes” that this fall would have hit a floor, hoping that the recovery will be achieved through a rebound with the concept of the letter “V”.

Bonds and country risk

In it fixed income segmentthe dollar bonds yield up to 2% headed by the Global 2038followed by Global 2030 (-1.4%) and the Bonar 2035 (-1.4%).

Thus, the risk country measured by the JPMorgan rises 2.5% and is located in the 1,429 basis points, so it accumulates a 12% jump in just three days.

The exchange market maintains an upward trend due to political tensionslack of liquidity, lower agro-export liquidation and impact of a recent new drop in the reference rate, which the Government downplays.

“There is no reason for (this new rise in the dollar) to have (inflationary) implications on prices,” Adorni remarked.

Source: Ambito

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