Chau Dollar: Investments recommended by a City Guru

The financial analyst Salvador Di Stéfanoknown as the “Blue dollar guru”offered an analysis on the Financial Front.What investment opportunities do you see in the market?

Then the analyst’s column, entitled “It’s pesos time”:

The best investment goes through the weights, the dollar Earlier rather than later will adjust downward, shares heating engines on the side route.

The share market reached its maximum point in January of the year, coinciding with the payment and income payment of sovereign bonds in dollars, from there the market began a process of taking a profit taking, within the framework of a challenging economic scenario, with few reserves and a dollar that intended to reach new maximums.

The agreement with the IMF, the recomposition of reservations and the leaving of the CEPO put a floor to the market, the dollar was located in the middle of the exchange bands, and the inflation began to yield very strong.

The greatest demand for pesos increased to the active interest rate, which is located around 50% per year, and 10% per year in dollars. Passive rates began to climb, the fixed term rate in pesos is around 34% per year for large sums, and in dollars in 5.0% per year.

In order for the peso offer to increase the dollar should go down to the band’s floor, something that does not seem available today, therefore, everything suggests that the market will continue with high interest rates, and that the microeconomy adjustment advances at full speed. The shops are the most affected, the rise in structure expenses, with loose sales, make profitability negative, there are plenty of businesses and lack customers.

The macroeconomics also suffers, the tax collection descended, and this implies an adjustment in public spending, the fiscal result will be positive in May, but this implies more sacrifices, the temporary decline of retentions to soy and corn cannot be maintained.

The placement of a 5 -year -old bonus was very auspicious, the bonus is already worth $ 110.5 and its return rate at $ 27.5% per year, with an inflation expected to 12 months around 20% per year, and much lower in the future. This bonus would leave great profits to investors.

We are 90 days after the elections in the province of Buenos Aires, and 140 days for the legislative elections of October 26. It would give the impression that we are still far to have reliable surveys that move to the market. Everything would indicate that from August onwards the strong movement in the market began.

What to do in the meantime?

The best thing goes through the instruments in pesos, since the consensus dictates that inflation will go down, while the LECAP and BONCAP show in most cases more than 30% annual yields.

Sovereign bonds in dollars do not show a great attraction in this context, remember that they pay amortization and rent on July 9. The peso bonus expiring in the year 2030 yields the annual 27.5%, while the dollar bonus yields 13.2% per year, to match both yields the devaluation rate should be 12.6% per year, if this occurs in dollars in dollars they would take much less than a dual boncap with expiration in March of the year 2026 that has an annual 40.0% tir.

Conclusions

. – The American bag continues with anodine behavior. The American government through a new law approved in the House of Representatives (and that is waiting for treatment in the Senate), could tax interest, dividends and income that flow to foreign countries, with rates that could go from 5% to 20%. This will add a 3.5% tax to the money sent from the United States from a foreign investor. Any resemblance to the Kirchner economic plan is mere coincidence.

. – The devaluation of the dollar in the world, makes investments in this currency internationally. Locally, the high interest rates in pesos attempt against the devaluation of the peso, rather we see a dollar with more desire to accommodate the floor of the exchange band.

. – The investment in pesos looks as the best option in times of uncertainty for the capital market, with a dollar that fails to define a trend, and an economic activity that does not seem to awaken.

. – The macro is still very orderly, and the micro suffers. In the last year there was a great increase in financing to the private sector, and delinquency begins to feel. The best thing is to open up in the pesos, until the share market shows the teeth for the great end of the year, which if it exceeds January 2025 left profits greater than 50% in dollars.