The agreement with the IMF will not only strengthen the reserves of the Central Bank, but will significantly improve the country’s financial flows over the next four years.
The imminent agreement with the IMF, which is expected to specify in the second half of April, marks a turning point for Argentine markets and the country’s real economy. This agreement not only will strengthen the reserves of the Central Bank, but It will significantly improve the country’s financial flows over the next four years.
According to the IMF: Where will it impact and what investments will it stand out?
Impact on real economy and inflation
The differential characteristic of this negotiation is that, since the immediate return of capital is not demanded, Argentina can strategically use those dollars to strengthen their reserves and enhance imports. Many of these imported products are key supplies for the national export industry, which will generate a virtuous circle: greater import capacity, increase in production, export growth, and expansion of GDP.
This favorable scenario will directly impact the Inflationary deceleration that we have already observed. By strengthening the external position and providing greater exchange predictability, pressures on prices will be reduced, contributing to inflation continuing its bearish tendency, although gradually.
Investments: Opportunities to take advantage of this context
For conservative investors, short -term bonds have an attractive opportunity with less exposure to volatility. We especially highlight the Bopy26 and BPOD7 Boppreales, which offer interesting yields with a limited time horizon (9.2% and 12.4% respectively).
For moderate and aggressive investors, the middle and long part of the sovereign bond curve shows a potential for significant appreciation. We recommend focusing on bonars and global from 35 (AL35, GD35, AL41, GD41, GD46) that could experience important capital gains in the face of improvement in macroeconomic perspectives, with Tirs in the range of 11.7% and 12.2%.
Actions with potential in the new scenario
Energy sector
This sector presents interesting opportunities, although with a necessary monitoring about the international price of WTI oil. It is fundamental be attentive to the barrier of 60 dollarshaving broken the support of 70 dollars.
In this context we see value in:
- YPF: Its diversification between Upstream and Downstream positions it favorably.
- South gas transporter (TGS): Direct beneficiary of the increase in production in Vaca Muerta.
Financial and Capital Market Sector
Economic normalization will especially benefit:
- Byma (Argentine bags and markets)
- A3 (Matba-Rofex)
- Macro Bank (BMA)
- Supervielle Group (SUPV)
Other sectors with potential
- Bioceres (biox), Accessible by Cedears: It is positioned in a sector with growth potential.
- ALUAR (ALUA): It is particularly attractive for two factors: first for its exposure to the energy sector, which represents a growing portion of its income, and secondly because despite having tariffs imposed by the US, its price remained almost without modification.
From Insider Finance we consider that we are facing a strategic moment to position ourselves in Argentine assets, taking advantage of valuations that do not yet completely reflect the economic recovery potential that is glimpsed for the next quarters.
Insider Finance CEO
Source: Ambito
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