Dollar bonds cut their streak but ended the month higher

Argentine assets absorbed volatility in emerging markets on Monday, with the focus on Brazil where the market responded with doubts to Lula da Silva’s victory in the presidential elections.

Dollar bonds made a streak of over five rounds of earnings and ended up mostly in the red. However, in the monthly accumulated they record profits up to 13%.

In Brazil, the market reacted with volatility to the defeat of the current president Jair Bolsonaro. The stock fell sharply at the opening, but then the Bovespa index, the main indicator of the São Paulo stock market, closed with a rise of 1.3%.

“Today’s fall is widespread in emerging markets but Argentine bonds amplify the deterioration“, warned in the consultancy firm Aurum Valores at the close of the round. In this context, although the country risk advanced by 1.4% on the day, reaching 2,621 points, in the path from the end of September it shows an improvement of 2, 8%.

Damien Vlassich, An equity analyst at IOL Inversiónronline, said: “Yes, there was no macroeconomic news or concrete changes In the future prospects that could have motivated the rise, we understand that the construction of positions took place in a context in which parities were at historically low values ​​”.

“This increase in demand (reflected in prices) was caused by actors who have tried to position themselves thinking about 2023 and a possible “electoral spurt” and not so much caused by a current shift in perspective, “he added.

On the equity side, contrary to the main international indices, the newspapers of the Argentine companies closed the month up. If you measure in dollars, the S&P Merval index accumulated an increase of over 8% in October. And so far this year it is already up 16.4% in hard currency, while the major US indices have fallen by between 19% and 30% respectively.

“Although prices in New York improved significantly for Argentine assets during the afternoon, they had a good overall performance that could also be exploited in the local market,” said Fernando Staropoli, of Rava.