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Market celebrates approval of law Bases: ADRs and Argentine bonds soar up to 13% on Wall Street

Market celebrates approval of law Bases: ADRs and Argentine bonds soar up to 13% on Wall Street
Market celebrates approval of law Bases: ADRs and Argentine bonds soar up to 13% on Wall Street

The market shows its enthusiasm in the segment of fixed income, with gains of between 4.5% and 5.1% in securities under foreign law (GD), while among those subject to local law the increases are led by the AL29 (+2.2%). In that framework, The country risk drops 102 units (-6.8%) to 1,382 basis points, which means the largest decline since mid-April.

Regarding variable income, The increases in ADRs are led by the financial sector, with Grupo Supervielle in the lead (+12.4%). BBVA and Banco Macro follow behind them, with increases of more than 7%.

Meanwhile, the S&P Merval climbs 4% in pesos. As in New York, the main improvement comes from Supervielle (+4.6%).

The Bases bill was approved after a marathon debate. In the vote on each article in particular, the RIGI was approved, which provides an extensive list of benefits for companies that want to invest in Argentina, but there were some points of the fiscal package that did not achieve a majority, such as the increase in the Income Tax.

The view of the market

Finally, the Base Law project was approved in the Senate, a fact that the market was eagerly awaiting. “We see what happened in the Senate during the early hours of today as positive given that most of the articles of the laws were approved with relatively benign changes,” Balanz maintained.

“We believe that this scenario is positive for prices, and we could see a rise in the GD of around 3-5% during today’s session. If Deputies manages to insist on the original earnings wording, we believe that prices will reach its recent highs again,” they noted.

For its part, for Delphos Investment it was logical that the Merval has taken a break from its upward trend amid the uncertainty, but they foresee a new rebound after the vote in the Senate. “It would not be surprising if the Merval returns to its range ceiling and, if we follow the pre-ruling market logic, we could expect the index to break this sideways path to rise above the ceiling of $1,350. But, this would imply a increase of 13%, so, if it takes place, it would not be surprising that I know of more than one wheel,” the entity detailed.

Waiting for inflation

During this afternoon Indec will announce the national retail inflation for the month of May, with the expectation being that of a new slowdown in the general monthly trend of prices, as well as the core register. As a reference, the REM-BCRA points to an inflation of 5.5% m/m in the month while for CABA inflation in May slowed to 4.4% m/m.

Source: Ambito

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