Despite the buyback announced by Massa, stocks collapse and country risk rises again

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Sergio Massa’s move to narrow the exchange rate gap and avoid a surge in the financial dollar is being scrutinized by investors. After the immediate reaction, With a slight decline in the parallel dollar and a strong jump in bonds, Argentina’s debt falls this Thursdaydespite the “buyback” promise that could prop up prices.

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In the midst of a negative day for global markets, Argentine bonds fell on Thursday and country risk, which managed to break through the low of 1,800 points after the announcement, rose again. The indicator measured by the JP Morgan bank stands at 1,864 units.

At the same time, the Merval index, which ended its positive streak on Wednesday amid profit-taking on global equity markets, is extending its decline. The leading indicator of the Buenos Aires stock market fell 3.6% after midday. There are stocks that lose up to 4.7% in the local market, such as Aluar.

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Thus, Argentine assets seem to have interrupted their summer. Doubts remain among investors about the reasons for the government’s move and its implied costs. “The main discussion around these measures has centered on whether the financing of these operations is done using reserves or whether they do it using SDRs and some residual loans from international organizations,” Cohen said.

Another point that raised suspicions was the high volume of deals shorter-dated global bonds filed ahead of the announcement. “Massa’s recorded message appears not to have taken the market by surprise and there are suspicions that some leaks of this initiative have prompted demand for these securities,” one trader said in close closing.

Many point out that with this buyback of securities in dollars, Massa manages to recycle something that market analysts have been observing for weeks: persistent official intervention on the bond market to prevent the prices of financial contributions from skyrocketing.


Source: Clarin

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