While the president Javier Milei arrived at Swiss to participate in the Davos World Economic Forumafter his tour of the USA, donald trump took over as president of the northern giant with an inaugural speech marked by the industrial protectionismhe support for oil extractivism and the international tariffs that will lead to a stronger dollar and higher rates for longer. That is why all this news will impact in the Argentine bond and stock market.
From CMA Research Department This is how they explain it: “Looking to 2025, The future of fixed income will be strongly correlated to the result of the legislative elections in October. At the same time, the year begins with certain difficulties on the international scene, given that developed country rates now look set to remain at a higher level for a longer period of time and the price of agricultural commoditieskeys for export, remains at very low levels“.
Bonds and country risk: what is expected to happen
As regards the country riskanalysts believe that it will continue in decrease, but at a slower rate, which will allow Argentina to return to place debt on the international market to meet future obligations. On the other hand, since CMAmaintain that the country could receive an “upgrade” in your debt rating if the mid-term elections are favorable for the ruling party or if the lifting of the stocks.
In terms of strategy, this consulting firm considered “hard dollar debt attractive with a medium-term view, in a context where the Government manages to maintain the reform agenda and advance the normalization and deregulation of the economy.” The Bonares 2029 (AL29) and 2030 (AL30) they find “attractive for their quick repayment” while, for a more aggressive profile, they highlighted the Global 2035 due to its low parity and high duration.
From this same report, they maintained that the fixed rate curves adjusted in the last week and showed implicit inflation levels closer to 20%. So it makes sense, according to CMA“have some positioning for those who seek returns in pesos by diversifying with securities CER 2025 and 2026“. Meanwhile, They left the ‘dollar linked’ debt for those who think about a medium-term horizon.
For its part, since Adcapexplained that, after the payment of the debt maturities of Bonares and Globals“we have not seen many investors rushing to reinvest recently collected coupons and rather waiting for a better entry point.” In his opinion, Market sentiment should improve as negotiations with the International Monetary Fund (IMF) gain momentum.
For a short-term approach, from this broker, they see a greater rise in bonds Global 2030 (GD30) and Global 2029 (GD29) since they had lower performance than the Global 2035 (GD35) and his peers Ecuador. “Assuming they return to the peak of their ratios with respect to Ecuador, the shorter terms 2029 and 2030 would generate a return of 12.5%, which compares to 10% of the Global 2035 (GD35)“they explained.
Stocks: which sectors will have the greatest upside potential
According to the latest report of IEBthe “equity” portfolio was kept unchanged, with 35% in the investment sector. Oil & Gas through YPF (YPFD), Southern Gas Transport Company (TGS) and Pampa Energy (PAMP). While they assigned the same weight to the banking sector (35%) and in this case they mentioned, Banco BBVA Argentina (BBV), Grupo Supervielle (SUPV) and Banco Macro (BMA).
Thirdly, they maintained 20% in the sector regulatedsince they consider that “the real increases in the rates received by companies during this year will have an impact on income growth for the sector, in addition to the fact that we believe that it will begin to consolidate itself as one of the sectors with the greatest possibility of distributing dividends” .
In this regard, they decided to maintain their position in Central Puerto (CEPU), Transportadora de Gas del Norte (TGN) and MetroGas (METR). Finally, they allocated 5% to real estate through IRSA Investments and Representations (IRSA)and 5% in the materials sector through Loma Negra (LOMA).
Source: Ambito
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