Analysts believe that there are grounds for continuing to hold positions in Argentine sovereign debt. The options being considered depend on the scenario.
The scenario of a contained exchange rate gap and decelerating inflation leads analysts to believe that there are grounds to continue positioning themselves in Argentine sovereign debt. This is despite the fact that there are doubts about when the restrictions will be lifted and the reserves that the BCRA can continue to accumulate during this month are being closely watched. With a fiscal surplus as its banner, Javier Milei’s government is still waiting for the economy to rebound. In this context, stockbrokers chose their preferred stocks.
It should be noted that in August, the sovereign debt in dollars advanced up to 11%, thanks to the Bonar 2038followed by the Global 2046, with 9.1%, and the Bonares 2035 and 2030, with 8.3%.
From Balancethey argued that for “more aggressive and optimistic profiles regarding the Argentine situation”, they maintain positions in sovereign bonds in dollars such as the Bonar 2038 (AE38) and the Global 2041 (GD41). According to this broker, both have “high indentureslow parities and great potential for revaluation if the country converges to regional IRR levels around 10%-12%.”
For its part, from Cohenprefer to do a mix between long and short bondsOn the one hand, long bonds such as the Global 2035 (GD35) or the Bonar 2038 (AE38) -which present a legislative “spread” of 8% against the GD38- “have the advantage that, by having lower parity, they benefit more from extreme scenarios, both positive and negative.”
Meanwhile, short bonds like Global 2030 (GD30) They benefit from “the intermediate scenarios and their much more aggressive amortization scheme”they explained in the same report.
For its part, from Investing in the Stock Market (IEB)argue that “the fundamentals of hard dollar bonds remain solid and justify being in sovereign bonds.” For them, Global 2041 (GD41) and the Bonar 2038 (AE38) Given the low parities, “they result defensive in the face of an adverse scenario and given the convexity, depending on how much the curve compresses, they could provide a greater upside than the shorts.”
“Despite this Short bonds could compress faster since they are the ones that allow the capital to be recovered more quickly. If we believe that the curve would first tend to flatten and then move downwards, it would be advisable to be positioned in the “2030 bonds (GD30/AL30)”closed their analysis.
Bonds: the key points of September that could impact the price
The accumulation of foreign currency by the Central Bank (BCRA) in September will be key. It should be noted that the This month, the Government promoted the reduction of the PAIS tax and the elimination of obstacles to steel imports. Despite this, the market does not believe that the national administration is going to dismantle the restrictions in the short term, something that has a negative impact.
It will also be important to analyze the result of money laundering in terms of economic flowsbut the growth of dollar deposits from the private sector was already evident.
Finally, it should be noted that the political level, particularly in the National Congress where the retirement mobility was approved and then vetoed, could add noise to the market, although It is ruled out that this could indirectly cause any exchange rate volatility.
Source: Ambito
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