Marcela Marina
Robert Citrone is the head of Discovery Capital Management and previously worked with none other than George Soros. Like other investment funds, he arrived in Argentina to analyze what is called in the field “entrepreneurial climate”. He praised Javier Milei and Luis “Totò”, Caputo, whom he considers “a great economist”. This Saturday he received a small group of journalists at the Four Seasons.
He confesses to being from the NBA and says he would like to bring an NFL game to be played at River, as he considers it a beautiful stadium and adds a fact “next year we will play Brazil and Mexico in 2025 and mentions other countries.” Europeans where they want to expand the championship, including Madrid and Germany. It is not excluded that Buenos Aires Add to this list of countries.
This investor met with Caputo, who he says he has known for 32 years. He says the minister told him inflation would have been lower than expected and that there are still reforms to be made in addition to fiscal ones, as well as insisting on them determination to reach zero deficit.
-Since when have you been interested in Argentina?
-I was at Fidelity Investments in the 90s as head of emerging markets investments and the first country I arrived in was Argentina in 1991, before convertibility we saw a great opportunity. The country was in worse shape, with an inflation rate of 2,000% and the private sector was not as vibrant and strong as it is today. We bought bonds and ended up with 25% of Argentina’s internal debt.
Robert Citrone Photo Guillermo Rodriguez Adami-What did you see at that moment in Argentina?
At the time I thought Cavallo was a finance minister with a good team. There were good expectations for the country, we thought the economy would stabilize, bond yields were high and the reward for high risk was good. Then came big hits like Tequila in 1995. However, despite Argentina’s poor financial performance, there are always investment opportunities in the country.
-And now?
-I went looking for PASO and surprised Milei. At that moment I thought that no matter who the president was, there would be change, positive change. If they managed to stabilize the economy and pass many of these laws, Argentina would grow at 5% or 6% for 3 or 4 years.
-Where are the investment opportunities?
-They go hand in hand with banks and energy companies. I own shares of Vista, YPF, Banco Galicia, Banco Macro and Pampa Energía. Also from Banco Galicia and Banco Macro. Banks represent a bet on the success of macroeconomic stability. Credit to the private sector in Argentina is 8% of GDP, one of the lowest percentages in the world, I have bonds from major corporations but also government Los Globales 29 and 30. I think the market is overestimating the inflation rate, which it will go down faster. I bought Bopreals on the secondary market, the last auction of 2.5 billion dollars lasted almost two months, it was impressive, it was a success for the government.
–Aren’t you afraid that the Government won’t be able to move forward with the measures?
Caputo and the President are very focused on zero deficit. And the Provinces will not have all the money they expect.
-Do you thinkdollarization is possible?
Dollarization would work very well, dollar Argentines think. The fact is that historically the peso is a volatile and fragile currency. But it needs prior changes through privatization, state reforms, orderly fiscal accounts and hard work. Butdollarization is not necessary.
-What do you predict for 2024?
-This year will have climate benefits with a harvest of 18,000 million dollars. With an energy sector that will contribute 6 or 7 billion dollars, so even if we are in recession for 4 or 5 months, the country will move forward quickly.
–In international issues, with war, uncertainty, what are the main problems
-Tensions between China and Taiwan are commonplace, however a military escalation between the two nations is not expected. China is very, very fragile and very, very sick, and Argentina can benefit some from that as long as it opens up the economy. Companies come to Latin America to serve the rest of the world outside of China. I’m very optimistic about Latin America, especially Argentina and also Mexico. We need to watch what happens with the elections in the United States. The FED, the European Central Bank, the Bank of England and the world’s major central banks will cut interest rates and this will be significant for global growth.
-What do you think of Argentina’s agreement with the IMF?
–I think Argentina has a good program with the IMF and doesn’t need more money. I have met with the International Monetary Fund twice in the last three weeks and seen the people involved in the program. They are very optimistic and surprised at how strong and broad the program is. The IMF can help Argentina by reducing interest rate surcharges. I think they can do it if they see that the program is successful and that Argentina could save 1 billion dollars a year, which is a lot. It’s something that I think they’re evaluating if the program works.
– What are Javier Milei’s strengths and weaknesses?
–One of the biggest strengths is that it is very honest. He tells people what he thinks, what he believes. He is convinced of his ideas. He has been honest with people saying that changes will be very difficult for a while. As for weaknesses I would say that he doesn’t have much experience, especially in politics, but I’m impressed by what I’ve seen so far. Because everyone thought he would be dogmatic and inflexible. He has his own principles, but he has shown a willingness to be flexible in the program and in what he is trying to convey. I see it as very positive. He is very popular in the United States, many people know who he is. The speech he gave in Davos was fantastic.
Source: Clarin
