End of the stock: Argentina adds points to return to the category of “emerging market”, how can you impact actions and bonds?

The long -awaited flexibility of exchange rateat least for human persons, announced on Friday by the Minister of Economy, Luis Caputoled many analysts to think that one of the positive consequences It could be eventual recategorization of Argentina, by the MSCI, from “Independent Market” to “Emerging Market”which would allow many foreign funds to invest in Argentine assets, enhancing the local market.

It should be noted that Argentina fell as a category and became an independent market (“Standalone”) on June 24, 2021. This decision, at the time, was due to the persistence of capital controls imposed since September 2019, which affected market accessibility and did not comply with the MSCI criteria for emerging. This category had been won in June 2018under the government of Mauricio Macri.

On Friday Caputo announced the elimination of exchange restrictions so that natural persons can acquire dollars at the official exchange rate without the limits in force since 2019. The decision was framed within a new agreement with the International Monetary Fund (IMF) by $ 20,000 million, destined to strengthen the reserves of the Central Bank.

Despite these novelties, it is important to note that Companies will continue to face limitationssuch as They will not be able to rotate freely freelycertain payments will still require authorization of the BCRA, and must also comply with certain regulatory requirements to operate within the new exchange scheme of bands. Given this, it is worth asking: Can you reach for Argentina to be recategorized as “emerging market”?

Argentina, closer to climbing category?

For the Bag Broker PPIthe lifting of exchange restrictions was “A key condition” For Argentina to be reclassified from “standalone” to emerging by MSCI. “Although Argentina has not ended with the elimination of the stocks, extremely important steps have been taken in this direction, which could be trigger for the start of the consultation period,” They warned.

“This is of the utmost importance considering that The rates of shares from reclassified to emerging countries usually have a performance superior to that of their peers, both during the consultation period and during the implementation process, “they added and completed: “This is largely linked to passive buyers of which the actions of the companies located in the reclassified nations are usually benefited.”

However, they highlighted that, since the reviews on the members of the index are carried out in June of each year, and the changes are implemented every May of the later year, It looks “unlikely” that 2025 is the year for reclassification.

For its part, from Invest in Bag (IEB) They also wondered if it is likely that at the next MSCI meeting in June the country will be categorized as an emerging market, and they were answered that “perhaps it would be A little soonthis process usually delay; But in our opinion If in this meeting Argentina already achieves a status of ‘under review’ or, even to the border market will already be an important advance And it will only be a matter of time to become an emerging market. “

Consulted by Scopethe economist Elena Alonso He said that “it would be very important if we can change the category of border to emerging. And although the meeting in June could represent progress to obtain that qualification, the result would be that there will be More income and flow of investments that go to our assets, in addition to improving contributions and reducing the country risk “.

Financial Market: What assets would they have greater Potential for Suba?

For PPIthe Argentine Variable Incomein it long term could be benefited by the recategorization of the MSCIalthough in the short term, This sector will be conditioned by a decrease in the activity if inflation intensifies. “Those linked to consumption They would be affected by both a lower demand and a lower value in dollars of their products, “they said, as well as the companies of public services.

Unlike variable income, Fixed income could rise and reduce the country risk, before the recategorization of the MSCI.

“Given the significant injection of initial capital from various sources and the brave strategy in exchange terms, we believe that Friday’s announcement constitutes A solid catalyst to trigger a remarkable compression of the country risk. The long -lasting ‘trace’ should generate greater returns supported by a notable compression of credit differentialswhich would allow Argentina to return to international markets and begin to refinance their debt, “they explained.