“With inflation high and political uncertainty, no asset guarantees the hedge. There are two fundamental dates: the first is June, when the candidate of the governing party is defined. The second is August, when the STEP result is known. This is how Eco Go economist Sebastián Menescaldi describes it the difficult landscape savers face to protect their money.
Andrés Borenstein, of Econviews, points out that not even the dollar – the classic coverage of election years – is a safe haven. With the current price, Whether it was bought cheap or expensive is unknown”, he says, and adds that today “perhaps UVA fixed terms (which pay inflation plus a rate) are one of the better options”.
Markets operate today amid exchange rate volatility and political uncertainties clarioneconomists, finance experts, stock market specialists and businessmen have analyzed the main options for allocating surplus money, below is a summary of their views.
1) MEP, CCL or blue dollar
Fernando Marull (FMyA): Overall, the MEP dollar appears to be lagging behind (runs at 7.8% a month) and outperforms traditional fixed terms.
Massimiliano Donzelli (Invertironline): Dollars are losing value today, but those looking to dollarize their savings have the alternative of Negotiable Obligations (ON), which are bonds issued by some companies to get into debt.
Pedro Siaba Serrate (PPI): There are several dollar instruments to choose from: ON corporate, CEDEAR, and provincial bonds. Most provinces today have a surplus.
2) Future dollar
Nery Persichini (GMA Capital): With a 100% gap, official exchange rate futures could be attractive to anyone. But the cost of what is implied today is high. For example, the December price is trading at $526, or an annual percentage rate of charge of 272%. For this reason, this derivatives market is more recommended for exporting or importing companies that need to hedge their business operations.
Lorraine George (Libra): The most probable scenario is that the Government avoids the devaluation of the official exchange until the STEP. The futures market is pricing in the impending political noise and contracts are expensive.
Siaba Serrate:Hedging is expensive because interest rates are so high. Perhaps it is more appropriate to go to the linked dollar (peso debt securities that adjust to the official exchange rate plus a small fee).
3) Fixed-term (UVA or traditional)
George: While offering higher yields than traditional fixed terms, UVA fixed terms, with minimum 90-day terms, are long and risky because they already start to mature after the PASO, and election uncertainty will no doubt add pressure to the dollar.
Donzelli: Fixed terms run after inflation. They cover the cost of living that has already passed and until prices stabilize, that’s a tough option. UVAs could be an alternative because they yield the cost of living plus a 1% rate. The complicated thing is the minimum term of 90 days.
Siaba Serrate: Despite the recent increase, the traditional fixed term offers negative rates relative to inflation. Because April’s data was bad and May’s is worse. The UVA are not a bad thing, but they are a financial instrument closely linked to the fate of the economy.
marull: For weight holders, short CERs are better than fixed rate ones. A fixed maturity yields 7.83% per month over 30 days. And the CER bond makes expected inflation plus an annual 3-point lead.
4) Stocks (local stock market or CEDEAR)
Persichini: In the variable income universe, we are constructive with the CEDEARs. These vehicles make it possible to avoid the Argentine risk in the electoral run-up and to set foot directly on Wall Street. These certificates perform well as a currency hedge as long as the price of the underlying stock moves little in New York. Investors comfortable with this focus should prioritize companies in the S&P 500.
Donzelli: Among the different sectors in which an investor can position itself in the local market, we see the unregulated energy sector as the outstanding one, because it has competitive advantages (mainly due to Vaca Muerta). In this sense, there are several interesting companies.
Siaba Serrate: The energy sector has optimistic projections thanks to investments in Vaca Muerta and the gas pipeline. CEDEARs are a good way to avoid risks.
5) Mutual funds
Siaba Serrate: It is a good alternative for those who are forced to stay on pesos. The good thing about FCPs is that they allow for risk diversification, provide liquidity and are managed by professionals.
George: The alternatives for investing the funds that will be used for daily expenses are spreading. The most common is an investment fund called “Money Market,” which offers rates just below fixed terms, but allows for same-day cash withdrawals.
Persichini: The FCI greatly facilitates the possibility that small savers and conservative treasuries are encouraged to invest. Liquidity, professional management and diversification are some of the most important attributes. The FCI industry manages $9.4 trillion, so there are alternatives for everyone. However, half of this amount is accounted for by “Money Market” funds alone, which are positioned in cash and futures.
6) Construction (spare parts, extensions)
Germán Gómez Picasso (Real Estate Report): If the investor has dollars, I don’t see it advisable to build until after the election, since the ruling party generally tramples the dollar as much as possible. It is better to wait. Against this backdrop and with the dollar stretched, costs would rise in dollar terms through the end of the year. It is advisable to go ahead with the purchase of the land, carry out the project and approve the plan. Who has excess weights, there is no discussion; The sooner you build, the better, because buying materials is one way to protect your savings from inflation.
Guillermo Oliveto (consultant W): Investing in a well is attractive because it is made in pesos. And all, in the event of a change that could raise house prices, in dollars.
7) Real Estate (purchase and sale of properties)
Daniel Bryn (investment advisor): It’s a good time to buy when nobody is selling today. There are 136,000 properties for sale and 3,000 registered per month. In return, because buyers bid very aggressively. The risk is that the square meter has been falling for 49 months and there is no guarantee that it will not continue to fall. Anyone who has the money today can buy the temporary annuity at a good price, and as an investment, which in the capital yields 7.5% per annum in dollars.
Natacha Izquierdo (Abeceb): For those with dollars, buying property right now is very affordable. It is an opportunity only for dollarized investors and savers.
8) 0km or used car
Olive grove: Cars currently come with a steep price tag, even when measured in dollars. It doesn’t seem like the best time to buy, but in this context, with the huge level of uncertainty, people are looking for protection. And something common is trying to buy goods made with dollars in pesos. Compared to last year, a car today costs twice as much in dollars.
Left: Cars have gotten more expensive but there is unmet demand. In the first quarter, sales increased by 12% and there are waiting lists until 2024. Are prices high? When were they cheap? The industry has never been competitive. The same happens with other durable goods, such as household appliances, but the problem is what to do with the pesos.
9) Durable goods (household appliances, electronics and motorcycles)
Lino Stefanuto (CAFAM): Durable goods prices are governed by the official dollar, which is cheap and scarce. This makes it interesting because anything missing increases. 90% of motorcycles are imported components. Demand continues to grow, and installment loans are available on the market to finance 50% of the total in 12 interest-free installments.
Menescaldi: Today the prices are high. It is convenient to buy only those models that have some kind of long financing.
Left: With motorcycles something similar happens with cars. Sales stack up 12%. As for other semi-durable goods, such as household appliances and electronics, in the latest Hot Sale operations they were 11% higher than in 2022, but 105% in billing. In other words, the same product costs twice as much as last year. But people, with this inflation, buy whatever they can buy.
Olive grove: The concept “don’t leave for tomorrow what you can consume today” has become popular, because people know that if there is a devaluation, things will be more expensive.
Share purchases proliferate
Specialists point out that in a context such as the current one, crossed by high inflation and a lack of savings options, the consumption of shares as a safe haven of value proliferates. Some statistics show that, despite the sharp increases in recent weeks, the demand for durable goods (including cars, motorcycles and household appliances) does not decrease.
“Consumers seek protection because there is a widespread perception that everything can get worse and that this can happen suddenly. Even if there are no certainties, for this it is enough to be afraid”, summarizes Guillermo Oliveto, consumer expert and director of the consultancy firm W. On this particular moment, he adds that faced with the impossibility of saving in dollars, “People try to buy things made with dollars in pesos.”
In this sense, it loses relevance if goods have risen above inflation or alternative dollar prices, i.e. they have become more expensive in dollars. So why is the demand increasing? Because there is the belief that tomorrow those same goods will cost more. That way, “many people just load up when they go to the supermarket, or wait for the card to close to do so,” says Oliveto.
Specialists speak of opportunistic consumption. It is no longer a question of looking for the best offer and promotion, but of cashing in as much as possible because with high inflation and exchange rate volatility, the pesos “burn” in the pockets.
Germán Gómez Picasso, of the consultancy Real Estate Report, points out that the reverse logic occurs in this sector. “Surely, this is a good time to buy and not to sell”he says. In this regard, he points out that “the values (in dollars) are at a technical level very close to their cost of construction and are back 13 years in nominal terms”.
Houses and apartments “have already decreased by 40% in dollars and the latest statistics indicate that they have stopped declining. The moment is now. If you have some dollar savings and for some reason you need real estate, I wouldn’t wait, because with each passing day the inferior products remain.”
The blockade of imports pushes prices up. The lack of inputs or products has made many goods more expensive, such as cars and motorcycles. Despite this, demand is overheating, to such an extent that there are waiting lists for buying a 0km that last until next year.
Source: Clarin
