Will Javier Milei be able to seduce capital? Investors’ concern

In an Argentina that, except in some sectors, has suffered a progressive insignificance in terms of investments, The question for the companies that remain, and also for the funds always ready to go, is whether the country will be able to seduce mattress dollars and foreigners.

In Davos they listened to the team led by Javier Milei. The government’s plan has attracted attention. But some believe it These are proposals destined to fall on deaf ears. “There are too many dinosaurs and they don’t go extinct easily,” a member of the delegation in the Swiss Alpine village reportedly explained.

“Argentina must do it normalize quickly to return to the markets at the end of the year. “We have to climb Everest and they are at base camp,” slipped the head of a fund.

YPF has already taken a step forward, emerging first after three years: it raised $800 million with a guaranteed ON on its exports. Alejandro Elsztain, from Cresud, leader in agriculture, celebrated 9,000 bids for his ON with a rate of 6% in dollars.

“Milei has a clear direction and “will not give up”slipped a banker according to his bosses’ comments in Davos.

Even if in that environment the magnifying glass is pointed control inflation to avoid another devaluation in March, before the arrival of soy dollars.

“Everyone wants to come to Argentina, but immediately the absence of legal security and an overprotective work system to the white wage earner in a country with 6 million black jobs and where there is no will to talk about the issue”, confesses Adrián Werthein, of the business group that bears his surname.

In the banks to which they have already resigned themselves enter the debt exchange rate in pesos after the liquefaction of Leliq carried out by Luis Caputo. There are $64 billion in inflation-adjusted liabilities that would be sorted with new bonds for 2025, 2026 and 2027.

Gustavo Neffa observes other deadlines such as $9,000 million in capital with private bondholders in 2025 of that debt that Martín Guzmán renegotiated. It seems that with campaign and energy dollars, money laundering and some investment are not enough. “The market is about delivery, about providing facts, results,” says the partner of Milei’s former reference, Darío Epstein.

There are others awaiting delivery. One case is that of Transelectric with the authorization to enter electrical power transformers in the USA. Javier Tizado’s company seized the opportunity that Washington opened by preventing the entry of Chinese products and seeking suppliers from neighboring countries that are not at war. He sends 124 million dollars to Enel, Iberdrola, to Warren Buffet’s Berkshire Hathaway holding company.

“I observe a prejudice that goes away a sort of oblivion of industrial activity”says Tizado, arguing that their exports do not withstand the combination of 15% withholding taxes and 17.5% PAIS tax for imported inputs.

It doesn’t seem like a sector to be disdained to me. The participation of the manufacturing industry in GDP is 20% and in 2023 they exported $20.6 billion. Tizado says the export dollar combining the 80% official clearance and 20% cash with liquid from which the 15% withholding tax is deducted is $771. The import dollar, which is the most official tax, is the PAIS of 17.5%. , to which is added a cataract of unrecovered taxes, reaches $1,250. The gap is high.

The industrialists of Cordoba They let Domingo Cavallo know who has his sword, Joaquín Cottani, as vice president of Economy. It turns out that Cavallo considers this a mistake. Naturally, the Cordobans They filed a lawsuit demanding the labor reform contained in the DNU. And the UIA followed in their footsteps.

In the meantime, there are works that are being delayed, such as the reversal of the Northern gas pipeline which, with Bolivia running out of gas, puts several provinces at risk. Despite the financing granted by CAF, Argentina has to shell out 100 million dollars You know, there is no money, but negotiations are underway with Bolivia to increase the supply.

Infrastructure Minister Guillermo Ferraro, who comes from KPMG and had customers from Gezhouba, the Chinese part of the Santa Cruz dams to Corporación América, is required by the privatizations in the pipeline.

In the Certosa di Parma Stendhal mentions that type of talent for slow and complicated public affairs. And he’ll take a lot of it. For AySA they think of a model in which works are inserted to provide, maintain and improve the service outside the company and that the operation passes into private hands.

The problem of Airlines, which according to the official point of view competes well in national and international flights, is the fixed expenses which amount to almost 1,000 million dollars a year. “Even if the billing is doubled it doesn’t arrive. This year the deficit will be 500 million dollars”they risk.

An emergency it is Key stream at the start of harvest. Another, the port of Buenos Aires, which requires urgent dredging and in what is a metaphor of the country tied by a thread, if the dredging is done the pier collapses.

In this scenario Werthein admits his doubts about the DNU and the Omnibus law. “There is a need convergence with the political class, with those whom Milei criticized during the electoral campaign. We will have to give in, but the danger is that the reforms will end up being distorted. “Parliament must give signals”.

He will do it? The former president of the Audit, Jesús Rodríguez, remembered the Nobel Prize winner Thomas Sargent, famous for his contributions to the theory of rational expectations: “The feasibility of any economic plan is defined by political sustainability.”

The opposition underlines that it cannot be accepted that “the adjustment of pensioners is at the will of the Prince”. But what there is coincidence is in the liquidation of the ANSeS Sustainability Guarantee Fund, especially regarding state holdings in companies, amounting to 5,678 million dollars, equal to 17.4% of the total. “It makes sense if it is a funded system and not a pay-as-you-go system,” they argued.

Meanwhile, banks are waiting for samples of the new $10,000 and $20,000 notes to arrive so that more systems can recognize them before they hit the streets in June.

Entities have multiplied their concrete and steel vaults to store banknotes due to central regulations and believe they will be able to reduce those costs.

Instead of Leliq they now have passes from the Central which allow them to maintain a rate for savers who, otherwise, it would fall much more. Of course, they are involved in a fight with Mercado Pago. Curious, they claim that Marcos Galperin’s company competes unfairly with them, given that the fintech does not pay some taxes such as advances on extra profits. “because it is protected by the knowledge economy law”.

In all this there are bursts of activity. Supermarkets and shopping accompany this January the collapse of petrol by 20%. JP Morgan, which is usually right, forecasts 4% inflation for December alone. Will it help lower prices? The bad news is that the drop in GDP would be 3.3%.