Despite the fears generated by the political crisis in Brazil with the attempted coup against the new government of Lula Da Silva, the Argentine assets remained immutable and this Monday they extended the positive streak they had been dragging since the beginning of the year.
On the equity front, Argentine stocks and bonds maintained their previous days’ gains, buoyed by a good day in international markets. The goalkeeper’s bag it gained nearly 2.8% measured in dollars, while bonds rose again. In just one week, stocks that have entered the stock market have already risen by more than 10% in dollars, in what the City has begun to define as a new “electoral exchange”.
The Sao Paulo Stock Exchange started the day in the red but when the situation in Congress normalized, it reversed those findings. Argentine assets benefited from the improvement in the Bovespa index after opening trades in the red on Monday.
Nicolás Max, from Criteria, explained: “It was a day where, although Brazil didn’t have the best performance in the rest of the world, it had no significant movementoutside the normal volatilities of their markets”.
The São Paulo market has responded cautiously to political events. But, even if uncertainty strikes a blow to the neighboring country, several City operators have agreed that, due to their lack of openness to the world, Argentine assets have a low risk of contagion dealing with a potential financial crisis in Brazil.
Santiago Palma Cané, partner of Fimades, said: “We still have to wait to see how this episode will play out in Brazil. If it can be controlled and things return to normal within a reasonable amount of time, there shouldn’t be a contagion effect.” .”
At the same time, he acknowledged that if the crisis in the country worsens: “It can be bad for Argentina, as well as for other countries in the region. But Argentina is so disconnected from international markets that the impact of this could be limited,” said the economist.
For his part, Gustavo Neffa, of Research for Traders, pointed out: “Argentine heritage come with a solid pickup which deepened in December and accelerated in January. Events in Brazil could curb this rebound, although this Monday was not the case, on a very good day in the US.”
From a commercial point of view, the rise of the dollar in Brazil, which rose by 0.45% on Monday to 5.25 reais per dollar, could worsen Argentine accounts. “A true that devalues itself it makes us more complicated, in a bilateral trade that is already in deficit,” Neffa said, although he advanced: “I estimate that this will soon return to its normal course.”
Source: Clarin
