Let’s look at the Merval graph in dollars:
Recall that the Merval has been in correction mode during the last weeks, something completely normal within an upward trend.
At today’s prices, a 19%drop accumulates, being at the same levels prior to the “$ pound” episode. It is a logical correction, although we cannot confirm the beginning of a new bullish impulse.
Since the beginning of 2023, the index has crossed four major rise movements and three corrections, this being the fourth. Each correction has served as an entry opportunity, and historical data indicate that, after each setback, the market has risen again.
To put it in context:
- Swing 1: 53% rise – 28% correction
- Swing 2: 70% rise – 26% correction
- Swing 3: 107% rise – 32% correction
- Swing 4: 53% rise – current correction …
In addition, color fact: February is statistically the worst month of the year for Merval, which reinforces the idea that this fall can be part of the usual market behavior and not necessarily a trend change.
However, what really attracts attention is the reaction to the “$ Libra” case: nothing just happened. Prices remained firm, as if the event had not existed. This is a clear positive sign, since it indicates that the market has confidence in the economic and political direction of Argentina. It would have clearly been a good excuse for it to continue falling, but it did not happen.
Firm bonds and even high country
While the shares have corrected, Argentine bonds in dollars have shown greater resilience.
Let’s look at the GD35 bonus, which had a relatively limited fall:
Are there other more conservative bonds? Yes, the Bopreal. What are they? Bopreal are bonds issued by the Central Bank to solve the problem with importers. Its expiration, concentrated in 2025, 2026 and 2027, places them within the current government horizon, an important detail for those who prefer to avoid political risks.
Let’s look at the case of Bopreal 27:
Merval3.png
It continues in the same start of the year values and, with a 10.1%IRR, it is a very interesting alternative.
In addition, although the country risk has fallen with the arrival of Milei, it remains at high levels (above 700 points), which represents both a challenge and an opportunity. If this indicator continues to go down, Argentine assets can start a new rise.
Another factor that can motivate the rise is the agreement with the IMF. A greater disbursement of funds could generate confidence and accelerate the stock exit process.
Conclusion: Is it time to buy?
History shows that corrections in bullish trends have been opportunities for entry for investors with long -term vision. The fact that the market has ignored the “Libra” event is a clear sign of trust.
The bonds are still firm, the Merval is at interesting levels after the fall and the country risk is above 700 points. Recall that Colombia has a country risk less than 350 points, Brazil is below 250 points and that of Uruguay is below 100. This shows that there is room for Argentina to continue going down. For example, with a drop of 200 points, Argentine bonds will rise around 15%.
While it is always key to have a clear strategy and proper risk management, everything indicates that Argentina continues to offer attractive opportunities.
Finally, I want to invite you to download for free a report that I prepared so you can prepare for 2025. There you will find 7 concrete ideas with really surprising alternatives, which present a great risk-back relationship. You can download it in this link: https://clubdeinversores.com/pdf-7-ideas-de-inversion-para-2025/
Note: The material contained in this note should not be interpreted under any point of view as an investment council or recommendation for the purchase or sale of a particular asset. This content has only educational ends and represents only an opinion of the author. In all cases it is advisable to advise with a professional before investing.
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.
