Throughout the month, the Government announced its intervention in the cash settlement market (CCL) in order to reduce the gap, which led to some doubts about Luis Caputo’s economic plan.
During July, the Argentine sovereign bonds in dollars and stocks had returns that were mostly negative. Throughout the month, the Government announced its intervention in the cash settlement market (CCL) in order to reduce the gap, which motivated certain doubts that him Luis Caputo’s economic plan could continue along the path it had been showing in previous months.
As far as fixed income is concerned, Dollar-denominated securities ended the month in mixed fashion. Among those that rose the most were: Global 2041 (+4.2%), and the Global 2038 (+2.5%). Meanwhile, those who fell the most were the Bonar 2041 (-1.2%), and the Global 2046 (-0.7%). “The Bonares, for their part, fell by an average of 4% in July”reported in its monthly analysis the SBS Group.
As for the titles in pesos There was a massive exit of the papers tied to the CERin front of the projection of a disinflation for the following months: thus the biggest drop was for the PARP (-13.3%), followed by the DICP (-9.2%). The Lecapsfor their part, emerged as a clear winner, as they rose on average by 3% in the short term, and in the long term by over 6%. At closing prices, The TNAs remained at levels between 37.20% (08/16) and 54.47% (03/31).
As for equities, Argentine assets registered the majority of declines in Wall Street. Thus the biggest losses in the month were for Take off (-12.2%), Telecom (-12 and Ternium (-8.4%). On the other hand, among those that rose the most were Globant (+9.2%) and IRSA (+7.7%). And on the local stock market, the S&P Merval fell 8% in July and 3.3% measured in dollars. As for the leading stocks, the biggest losses were for Telecom (-15.8%), Transener (-13.6%), Supervielle Group (-13%). In contrast, the only one that rose was Commercial Society of the Silver (+19%).
What happened in July with stocks, bonds and bills
“The month of July was notable for sharp cuts in sovereign bonds, BOPREALES and S&P Merval shares. Throughout the month, the Government continued to advance its reforms, including the repurchase of puts by the BCRA from banks and the change in exchange rate policy, with the BCRA announcing its intervention in the cash settlement market (CCL),” he said. Guido NigraFinancial Advisor & Sales Trader Private Wealth at Balance.
It should also be noted that July was a volatile month in the foreign exchange market as well, since Financial dollars exceeded $1,400 and the exchange rate gap reached a break of 55%. On the international scene, the month was marked by the departure of Joe Biden of the electoral contest in the USA, the results of the balances of the technological in Wall Street which raised some doubts and, as always, the focus was on the Fed and the signals to cut rates.
Maximilian DonzelliStrategy Manager at IOL invertironline, agreed with the analysis, stating that “during the seventh month of the year, and in line with what was June, we have had a negative performance for Argentine financial assets, which had shown much euphoria and expectations during the first part of the year” and stressed that “the big news was the first payment of sovereign bonds, towards the beginning of the month.”
“In the midst of all this, the uncertainty about the accumulation of reserves International (given the sterilization of pesos by the purchase of foreign currencies, which imply a lower rate of accumulation) and access to external capital markets in the face of next year’s payments (The country risk closes the month above 1,500, when it was previously below 1,200)”, he added.
August: What the market can expect
“For the month of August, Expectations are for exchange rate stability, given that the current administration has announced the continuation of the easing of restrictions on the currency controls. and progress in reducing inflation. In turn, the Government implemented details of the new money laundering and that will have a direct impact on financial assets”Nigra added.
It should be noted that this Wednesday, Minister Luis Caputo expressed that July will report the lowest inflation of the year, suggesting it will be below 4.2% recorded in May. In addition, he projected that inflation could start at 1% or 0% in September. He also confirmed that Dollar debt maturities until January 2026 are guaranteed by repos (bonds as collateral). These statements were taken as positive by the market.
Source: Ambito
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