Investments in August: Bank ADRs soared up to 35% and bonds jumped up to 18%

It is important to highlight that, during this week, the American bank JP Morgan decided to update his vision on the banks in Argentina, taking into account certain advances and persistent risks in the country. In particular, he highlighted the Galicia Bank, which came to be classified as “Overweight” (OW), positioning it as the main option to take advantage of a possible rebound in the credit in the country.

In the experts’ analysis, it was highlighted that “The Merval showed strength and ended a two-month consecutive downward streakbeing “one of the best performing indices in a volatile August for global markets.” In this way, “Argentine assets also extended and recovered their upward trend from the beginning of the year,” he explained. Maximilian DonzelliResearch Manager at IOL investingonline.

Bonds and country risk: August, the month of recovery

The sovereign debt in dollars advanced up to 11%, thanks to the Bonar 2038followed by the Global 2046, with 9.1%, and the Bonares 2035 and 2030, with 8.3%. In turn, the Bopreales rose to 10.6%, led by the BPY26he BPOB7 (+7.5%) and the BPOC7 (+5.1%).

As for the debt in pesosthere was a revival of appetite for bonds CER, which advanced to 17.8%, by the DICP. They also rose sharply TZX28 (+15.1%), the DIP0 (+14.6%), and the TX28 (+14.4%). The Lecapsfor their part, rose up to 5%, hand in hand with the bill that matures in March.

Global markets: what happened in August

At the beginning of the month, the Tokyo Stock Exchange record its worst fall since 1987 and spread to the world’s markets, which operated with heavy losses and much volatility. The Bank of Japan had raised interest rates, causing the yen to appreciate. Some investment funds that carried out a “carry trade” With this currency investing in the North American market they saw how Funds became more expensive, adding to fears of a recession in the US.

However, certain signs occurred throughout the month that it is very likely that the Federal Reserve (Fed) finally decide end its cycle of high interest rates and begin to lower them, calmed fears. So, Wall Street closed August with all its indicators in green and with the selective S&P 500 chaining its fourth consecutive month of gains (+3.7%). In turn, the Dow Jones of Industrial and technological Nasdaq rose by 3%.

Stocks and bonds: what can we expect for September?

The Minister of Economy, Luis Caputo, confirmed through the X platform that, starting Monday, September 2, The Government will reduce the PAIS tax from 17.5% to 7.5%. On the other hand, the Market Expectations Survey (REM) prepared by the BCRA projects an average monthly inflation of 3.7% for the remainder of the year. The Government remains committed to a fiscal surplus and lower inflation, but has doubts regarding the opening of the cepo.

“In this context, positive returns can be obtained along the yield curve. Lecaps (Fixed rate capitalization bills in pesos), especially in the medium and long tranches, where the TNA exceeds 50%. For defensive profiles looking to index to CER (Reference Stabilization Coefficient – ​​Inflation Linked) in the long term, bonds TZXD6 and TZXD7 “They are attractive options, given that the curve remains favorable in those sections,” they said from Balance.

For more aggressive profiles, dollar bonds stood out, such as the Bonar 2038 and Global 2041. “If Argentina manages to recover Its emerging market status means local equity would benefit significantly.. Let us remember that the maximum of the S&P Merval index was reached during Mauricio Macri’s administration, reaching 1,800 points measured at the CCL (January 2018), and we are still far from that historical level,” they added.

Finally, they explained that “There are high expectations for a successful whitewash”which would significantly boost the prices of assets available for trading, such as sovereign bonds, the Bopreales and the corporate.