The leading Argentine index S&P Merval lost 1.5%, to 89,512 points, after gaining 3% in the previous session and closing January with a rise of 8.9% (in pesos).
“The market is affected by these internal government issues, which can affect the negotiations (with the IMF), or at least slow them down,” said a stock trader and added “Profit-taking is unavoidable in this context.”
On Friday, the president, Alberto Fernández, announced that the country had reached an understanding with the IMF to restructure debt payments of more than 40,000 million dollars.
The resignation of Máximo Kirchner from the presidency of the FdT bloc exposes the differences that persisted within the government coalition to reach an agreement with the IMF. “The slam of Máximo Kirchner’s door is not surprising and is part of the complex path that the pre-agreement with the IMF must still travel. The treatment in Congress will surely be turbulent, forcing the government to look for circumstantial allies to compensate for the potential loss of 18/20 deputies and at least 5 senators,” Delphos Investment highlighted.
And the task will not be less for the ruling party since the opposition will surely stay on their game, keeping up with a harsh discourse. “At some point it should provide some ‘undercover’ collaboration to provide some deputies and/or senators if necessary. It is likely that we will see an opposition with harsh words, but when the time comes, providing governability”, they added.
In this framework, local assets are expected to maintain high volatility, which could mark buying opportunities every time prices drop. “Argentine assets are within a ‘plate bottom’, operating in a wide lateral channel that does not currently find arguments to trigger a `Bull Market`, but that the floors are evident every time extreme valuation levels are touched “, commented an operator.
Regarding fixed income, the main bonds in dollars lost up to 2%, Meanwhile he Argentine country risk rebounded slightly to 1727 points, after scoring five consecutive casualties.
Source: Ambito
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