The bank’s change of mind towards a more optimistic view of Argentine bonds comes after the bullish rally on Wall Street, but also due to a change in the global context that could benefit investors in emerging markets.
Morgan Stanley A month ago, it removed Argentine bonds from its recommended investment portfolio in debt from emerging countries. However, it has now reversed course and produced a report in which recommends to its clients the possibility of having Argentine securities in their portfolios.
The return of the Argentine debt to the US bank’s recommendations portfolio came after a strong bullish rally on Wall Streetwhich led Argentine papers to rise almost 10% in the last six days and at country risk to drill the 1,200 basic points (around 1,170) and hitting the minimum of the Government of Javier Milei.
Morgan Stanley changed its mind and now recommends Argentine debt
In his report, Morgan Stanley highlighted that “Despite missing the last rally, we once again place Argentina in a similar position”. As experts point out, The local market has stabilized in recent weeks after experiencing a growth boom in stocks and public papers.
“It continues to look cheap, both in absolute terms compared to our valuation scenario and compared to high-yield emerging markets,” they added in the debt report.
In this way, the investment bank suggests that even though investors missed the last rally in the national bond market, Argentine debt now regains a place in its portfolio.
Morgan Stanley recommends bonds maturing in 2041
Morgan Stanley focuses on bonds maturing in 2041. According to its estimates, “finances are tightening”, so they expect “currency flows to improve in the fourth quarter of 2024, which could lead to an even further decline in inflation and increase the chances of unification of the exchange markets”.
The bank’s argument for changing its mind was that a series of “positive surprises” At a global level, they contributed to a more optimistic environment for emerging economies. “The most cautious view has been challenged by three successive blows: the Fed’s will not to be left behind, the shift in China policy and US data supporting the soft landing scenario,” they noted.
Morgan Stanley.jpg
Morgan Stanley’s shift toward a more optimistic view on Argentine bonds reflects both a improvement in the valuation of local debtas well as a change in the global context which could benefit investors in emerging markets.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
