Stock market sources say that an opportunity has opened up to rotate sovereign bonds in light of the widening spread in recent weeks.
Some specialists see the opportunity to replace GD38 with AE38.
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In recent weeks, The ratio between Bonares and Global bonds widenedSpecifically, some specialists see the opportunity to rotate the Global 2038 (GD38) for the Bonar 2038 (AE38), since the average “spread” during the Government of Javier Milei was at 5%, while in recent days it has expanded to between 6% and 7.5%. However, This strategy presents some reservations.
Assuming that the gap between both titles is at 7.5% (it reached that level on Tuesday), with this change we obtain 7.5% more nominals, and both the AE38 and the GD38 They pay the same coupon, but What changes is its legislation (New York Law is changed to Argentine Law).
To execute the strategy, the operation would be carried out as follows: GD38 is sold against pesos at 24 hours, and AE38 is bought against pesos at 24 hours.
Bonds: how to build a portfolio in this context
For Juan Pedro MazzaFixed Income Strategist at Cohenin an analysis this week, said: “Tactically, the dynamics of Argentine bonds It’s still very bad and we suggest reducing exposure until signs of a rebound appear. Strategically, Bond parities continue to offer a very good risk-return ratio.”
For this expert, The suggestion is a portfolio made up of 60% of the AE38 bond, whose spread legislative is 6%while that of the rest of the Bonares is close to 2%. For the remaining 40% of the portfolio, they recommend dividing it between GD35 and GD30.
In conversation with Ambit, Matteo Reschinihead of Research at Inviuexposed some risks regarding the financial strategy of changing legislation: “Today, with the current spread between Bonares and Globales, it seems to me that, due to what the exchange of legislation implies, It is in your favor to have Global. I like the New York legislation better because if we suddenly have adverse consequences, Debt with local legislation has more room to fall than foreign legislation“.
Source: Ambito
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