After the defeat of the ruling party in Congress and amid market uncertainty due to the fall of its first law, From tomorrow the main Wall Street banks will land in Argentina meet government authorities, interested in Javier Milei’s program, the prospects of bonds and possible investments.
The visit will be led by representatives from Barclays, Bank of America, Citigroup, Goldman Sachs and HSBC, along with a group of clients (mainly investment funds) to talk to officials of the Executive, the Ministry of Economy and the Central Bank, as well as businessmen, political consultants and economists.
Investors will come to “monitor” the government bonds that several funds bought last December. With Milei’s arrival in power and his promises to carry out a shock plan, dollar stocks rose to 14%, but fell to nearly 7% last week after the setback suffered by the omnibus law and the war unleashed with the governors.
“Everyone will have different programs, the interest is the same as in all the other countries in which we invest… some will have bonds and will see if it is time to sell or not, others will see if it is worth buying them… they are all investors in bonds, mostly sovereign, there could be something corporate”, they underlined from an investment fund.
Barclays will arrive this Monday in Buenos Aires and then the other entities will be added. Next up will be Jane Fraser, CEO of Citibank, who arrives next Friday. HSBC executives will do so in the last week of February. “The idea is to contact potential investors with businessmen and some authorities,” one of the banks said. “There is interest in rediscovering Argentina, albeit with great caution” they stated from below.
BlackRock bought last week $1.8 million of the Bopreal dollar bond, with which the government seeks to regularize the commercial debt of companies. The operation became known after the virtual meeting that Milei had with Larry Fink, CEO of the largest investment fund in the world.
In recent days the major US banks have sent signals of caution towards Argentina. JP Morgan estimates double-digit inflation until the first quarter, a decent jump in the official dollar in June and confirms that “the main risks are governability and population tolerance to adjustment”.
In this sense, he considered the rejection of the omnibus bill “an unprecedented event” and warned that “the lack of support from Congress suggests that The administration should recalculate its political strategy, opening the door to a more difficult period that could lead to greater volatility,” which could impact the exchange rate gap.
The banks’ research services, in charge of organizing the trip, hope that their clients will be able to meet the Minister of Economy, Luis Caputo, and his Finance Secretary, Pablo Quirno, the head of the Central Bank, Santiago Bausili, and the its vice-president, Vladimir Werning.
“There will be a lot of trips over the next 2 or 3 weeks, the fact that there are so many trips shows that there is interest“, reported a Wall Street source. However, from the largest international forum, they argue that the trip is part of the framework of visits that are organized every year to several countries in the region.
During a speech at the Herbert Business School in Miami, before the fall of the Bases law, its architect Federico Sturznegger stressed that “Argentina is an extraordinarily stable country, although not in economic or inflation terms”. And he predicted: “The corporate state is a very difficult enemy to defeat”.
Source: Clarin
