Finally, the Government has its Bases law and the fiscal package, after 6 months of debate in Congress. The ruling party managed to reinstate the income tax and modify Personal propertywhich represents a positive signal for a market eager for signs that support the Argentine asset rally. Beyond the content of the reforms, what is truly significant about the final approval of the law is the political message that the libertarian administration manages to project abroad, especially towards the investors who were attentively waiting for this signal.
However, it is important to note that the market is not completely satisfied. The slowdown in the pace of purchases by the Central Bank (BCRA) in June, together with the firmness with which some officials kick the debate on the stocks, They set the pace of the next signals that the Government must issueIn this context, the market is reminded that there is still a debt outstanding, but it is still celebrating the approval of the law.
The context
As explained to Ambit Santiago López Alfaro, president of Patente de Valores, expects the market’s reaction to be positive. The analyst highlights a complex international context that did not support local assets and in fact harmed them “in which all the media noise is affecting, and the rise of the dollar has been coordinated with a strong fall of the Brazilian real and the Mexican peso.”
The situation in Latin America has been quite complicated in recent weeks, Alfaro adds. For the analyst, “bonds and stocks, despite having fallen from their highs, have had a good performance for the year. And the fact is that sovereign securities continue to rise in dollars quite strongly and at the same time stocks do too.
Alfaro is conclusive in pointing out that after the approval of the Bases law, Argentine assets “They will resume the upward path, but nothing out of the ordinary. Argentina is going to continue rising, although it still has many issues to resolve“.
Bases Law would attract outside attention
For its part, Gaston Lentinishares with this medium that, part of this news was already in prices. And although bonds and stocks did not recover the highs they had in May, for the analyst the important thing is that a door is opened so that from abroad “they see us as a country that really seeks to be respected and to respect others.”
What the strategist refers to as the positive signal of “achieve consensus as a society in Congress, even with opposing forcess”, which opens the possibility of foreign capital coming to invest in the country. That being the case and with respect to the market, Lentini projects “a drop in country risk, at least back to 1,100 points“. That should push bonds up again..
And for national equity, the advisor reiterates his optimism, “first in the oil sector, then in the gas sector and then in the construction-related sector“.
From Delphos Investmenthave a view similar to that of Lentini, and hope that once the Bases law has been unlocked and with its approval, they will allow, on the one hand, “unlock private investments and encourage the entry of funds from abroad” and on the other hand, consolidate the fiscal adjustment in order to continue advancing in monetary normalization. Finally, it will be necessary to “attack” the exchange front, Under current conditions, it is the most complex one, and where the risks are not only local, holds.
News in development.-
Source: Ambito
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