Argentine shares on Wall Street fall up to 5% amid global issues and local doubts

The leading S&P Merval index of Argentine Stock Exchanges and Markets (BYMA) rose 0.71%, to 81,577.43 units, after losing 3.13% the day before and accumulating a decrease of 2.30% so far this year. anus.

“A strong signal of rapprochement between the parties in relation to the agreement between the National Government and the IMF will be essential for the Merval to rebound,” said Portfolio Personal Inversiones.

He added that “we will have to be attentive to what happens with North American rates, whose movements have an impact on the valuation of all assets.”

Argentina must face a payment of some 730 million dollars to the IMF on Friday, before another 365 million dollars on February 1 and a strong maturity of 2,900 million dollars in Mar

Argentine assets began the week with strong declines, although somewhat more moderate than was projected at mid-wheel, in the face of an adverse climate for global markets due to the possibility of a Russian invasion of Ukraine, and the prospect of a More aggressive Fed, which added to the doubts at the local level due to the renegotiation of the debt with the IMF.

At the global level, the possibility of a Moscow invasion of Ukraine, although Russia denies any invasion plan, hits world markets. The European Union is prepared to defend itself against any possible Russian cyber attack if Moscow invades Ukraine, said Josep Borrell, the bloc’s top diplomat.

“The increase in risk aversion in financial markets due to a possible conflict between the United States and Russia in Ukraine, the change in monetary policy by the Federal Reserve and the economic slowdown in the United States have caused the dollar to strengthen against against its main counterparties and against emerging market currencies,” said Alexander Londoño, an analyst at ActivTrades.

At the local level, the focus is on knowing what position the Government will take in the face of the expiration this Friday of more than US$730 million, corresponding to a repayment installment of the 2018 IMF Stand By loan. Argentina must also pay some US$ US$370 million to the agency on February 1, before a strong maturity of US$2.9 billion in March, with a BCRA with scant reserves.

“We suspect that the government will reach a new agreement with the IMF this year, possibly in the first quarter, and take tentative steps towards more market-friendly policies. Even then, we would have doubts about the sustainability of Argentina’s public debt in the medium term.” “Capital Economics said.

Bonds and Country Risk

Yesterday, the day was marked by high global risk aversion, and Argentine bonds did not escape this reality: they lost up to 4.1%, such was the case of Bonar 2029, which already yields more than 29% per year. But they were also punished Bonar 2038 (-3.5%); and the Bonar 2030 (-3.4%). Among those governed by New York law, the Global 2046 led the declines (-2.8%); followed by Global 2035 (-2.6%), and Global 2030 (-2.3%).

The weighted average price sank to US$29.93 and hit a new post-2020 restructuring low. “Beyond the external turbulence, the debt suffers from its own uncertainty. The focus this week will be on the payment per US$ $731 million to the IMF on Friday and another $370 million the following week. Meanwhile, it is not ruled out that the debt will test new minimums as we approach the March 21 deadline without an agreement,” they commented from a brokerage firm.

Therefore, the Argentine Country Risk rose 2.4% to 1,961 basis points, that is, a new record since the debt swap with private bondholders.

Meanwhile, dollar-linked sovereign bonds closed with most losses: the long tranche (T2V2 and TV23) fell up to 1%.

Finally, CER-adjusted bonds in pesos maintained the demand shown at the end of last week and gained an average 0.5% along the curve, with TX26 standing out (+1%), but volume concentrating on TX22. (+0.7%).