Although the Government is making an effort to “give certainties” to the market, the investors are wary of signals and dollarized debt prices are driven more by external stimuli than by official announcements.
After Tuesday the Central Bank ended up buying much less than the $200 million announced since the Ministry of the Economy, dollar bonds have resumed their downward path. Neither does the discussion being held by the governing party – led by Gabriel Rubinstein, Sergio Massa’s deputy minister – and the opposition on the “bomb” that the debt in pesos means for the next government.
On a negative day for international markets, Argentine bond prices are back in the red. After midday, securities fell to 1.2% and country risk rose again to 1,912 units. The Global 2030, the bond that concentrates over 90% of the repurchase operations announced by the Government on 18 January, is the one that loses the least and marks a drop of 0.3%.
“The foam” from the ad of the debt repurchase has diluted over the days and not even the communication given by the finance secretary, Eduardo Setti, on Twitter this Tuesday has managed to rekindle the appetite for Argentine bonds.
Setti had said that on Tuesday the government would come out to buy back 20% of the total amount allocated for the bailout of securities, or about 200 million dollars. It did so in the midst of a new price drop, and the release helped it achieve a rebound.
But in the end, the repurchase made was much less. Without official data, on the market it is estimated that the Central has allocated between 25 and 40 million dollars to recover the debt securities. The most conservative calculations estimate that the government has already spent 50% of its firepower in the market, while some consultancies predict that bonds worth 640 million dollars have already been purchased.
Sources close to Economy acknowledged this Tuesday’s announcement was to set ‘a path of expectations’ and make it clear that the government maintains its bond price support strategy. Investors appear to be paying attention to other things: Argentina’s debt moves in the same vein as emerging market bonds, which fall on Tuesday.
Martín Polo, from Cohen, explained: “Setti’s announcement ultimately met with little results. Yesterday the bonds ended up almost in parity and this also marks the fragility of Argentine sovereign debt, which has already fallen by 5% in the last week. With the country risk once again exceeding 1,900 points, it seems that there is no news of strength for local sovereigns”.
Source: Clarin
