Bonds lost 18% in June, while financial dollars rose 20%

For the majority of Argentine investorsJune was a month to forget. Financial dollars were up 20% and bonds were down about 18%, with rising inflation increasing uncertainty and reinforcing investor caution.

In June, inflation was around 5.3% according to private forecasts. For the first time in the year the month ended with alternative dollars by winning the race.

The blue dollar rose 13%, while the MEP advanced 19.5%. cash with cash (CCL), 20.1%. What lagged furthest behind was the official dollar, which moved 4.2% and slowed the pace in May, when it advanced 4.4%.

The winners of the month were those who wagered cash with liqui. Among the losers, those who have opted for the titles stand out.

Inflation-adjusted weight bonds sank amid a sale by investors worried about the sustainability of the debt increase. And those pesos put the alternative dollars under pressure, given the distrust of the market since until a few days ago – when the shares were given an extra tourniquet – the government could not accumulate foreign currency.

The bonds that have lost the most were the Global 30 with 18.9% and LA35 with 18.6%. ERC-adjusted pesos bonds, according to the inflation index, took a run in the month and the hardest hit was the Boncer 26, which lost 23%, while the Boncer 23 fell 9%.

Merval closed the month with a negative change of 4.3% in pesos, and up to 19.2% in dollars considering the CCL exchange rate.

In June, the Argentine market experimented a perfect storm Global tension was added to the local quagmire, in a month that predicted a new rate hike of 75 basis points, the most marked increase in 28 years.

The storm was felt everywhere, to the point that the Wall Street S&P Index had a drop of 20.8% in the first half, the steepest since 1970.

Analysts recover some wreckage. “The dollar corporate debt universe was among the best. When liquidity with liqui increased, the parities of these instruments were not as affected. The market perceives in a friendly way the willingness to repay corporate debt instruments from quality issuers in dollars, “says Santiago Abdala, director of Portfolio Personal Inversiones.

“This explains the bipolar difference between the prices of sovereign and private debt instruments“, summarizes.” If these yields are measured in pesos, over the month we see that the YPF corporate bond gained 9%, as it fell 10% in dollars but at the same time the liquidity bond rose 19%. . And the Pan American Energy bond gained 21% in pesos because it rose 2% in dollars over the month, “explains Abdala.

Daiana Olivera, Cohen’s strategist, says that in June “there was a lot of volatility in the local market and to this we must add the effect of the Fed rate hike”.

In this context, Olivera highlights the performance of CEDEARs, the instruments that represent shares of companies listed abroad. “Among the CEDEAR EFTs, those that track an equity index, seven of the nine operating in Argentina closed the month with increases due to the increase in liquidity with liqui. On average, they increased by 10% “, emphasizes Olivera.

“Over the past month, the market has shown that it is giving high priority to shortening duration, which happens with all assets,” said Olivera.

what’s coming

Maximiliano Donzelli, Head of Research at IOL investonline underlines this “The first half of the year was negative for most equity indices“Looking ahead,” there are always opportunities that favor assets with low volatility and less exposure. For investors looking for a 6 to 9 month investment horizon, the current yields of the CER curve with the recent correction look attractive. In this sense, the TX23 is one of the stocks suggested for this objective given the high levels of inflation “.

On the other hand, “for a period exceeding 9 months, dollarization should be in a portfolio and dollar negotiable obligations are attractive. Companies such as Pampa Energía, Capex and Vista Oil & Gas present alternatives for investing dollars in fixed income with an expected average return of 6% per annum. “