The GD30 Bonus is a public bond issued by the national government in US dollars under the laws of the courts of New York that pays 0.50% per annum interest and matures on July 7, 2030.
This bond has usually and legally been used to buy and sell dollars in the stock markets.
Those that they buy they do it with pesos and sell them for receive dollars in an overseas account. Whoever sells does it against dollars and receives pesos. From the purchase process and the quotient between the value in pesos and dollars, the “counted with settlement” that the government tries to stop to deal with a “run” exchange started with 2023.
The GD30, quoted at US$35.70, was part of the deal repurchase of bonds of debt for US$ 1,000 million nominal (actual would be US$300 million) announced by the Minister of Economy, Sergio Massa and that at the end of the week it hadn’t gotten a good response from the markets.
With regard to the announcement of the debt repurchase, the attention of financial operators was drawn to the lack of reference prices for the purchase, which the government explains by wanting to surprise the market, but on the other side of the counter it shows a veiled objective that even the officials acknowledge 48 hours after the launch: The move responds more to the increase in free dollars than to an attempt to lower the country risk rate to seduce investors.
With the party in government practically en bloc (including the deputies who answer to Sergio Massa) starting a Court impeachment of justice in the election year and an economic team trying to postpone difficult decisions with the idea of being able to go to elections, it would be too much to expect Argentina to qualify for receive investment after years of closing external funding.
The discretion in the use of Central Bank reserves also becomes relevant (even when they amount to US$ 300 million) in a context of foreign currency shortage and when the Drought threatens to reduce agricultural exports by an amount that representatives of the field estimate could represent $15 billion less than last year.
Minister Massa insists will not devalue and which, therefore, would continue to try with partial solutions to stabilize the exchange rate gap.
It is recognized within and outside the government that with the gap at 100% (difference between the wholesale dollar ($183) and the CCL ($362) it will be very difficult to liquidate the exporters.
“Unless the gap drops to 80%, the exporter is reluctant to close operations,” said a cereal market expert who, however, opened a window of optimism on prices in the international market after the depreciation of the dollar around the world.
While Massa battles the rise of free dollars and is betting that a high interest rate for peso savers will keep them from going to the dollar, there are investors showing another side of the market.
Despite the decline of the last two rounds, the Merval index of the Buenos Aires Stock Exchange rack up a 125% increase from July and operators continue to bet that waiting for the election year will keep the market active with very low prices.
The start of the election year poses a two-faced scenario politically very complicated and with Minister Massa trying to stop the dollar in what he considers a race while there are investors looking for shares of Argentine companies betting on a better future.
Securities transactions in recent weeks, and in particular those of January 16 (holiday in the US, therefore all local) and January 17 (record levels of transactions) are analyzed under the cloak of suspicion that their buyers would have inside information to regarding the debt repurchase that was coming. Will the list appear?
Finally, if the lack of dollars represents a headache for the government, the maturities of the debt in pesos in the second and third quarters, at a rate of $2.5 billion a monthThey leave no room for relaxation. Going to cover holes where water enters does not always save from shipwreck.
Source: Clarin
