Positive streak: after the changes of government, the rebound of Argentine bonds continues

Everything indicates that the market rally will continue this Friday, with Argentine dollar bonds catching up. In the pre-market, transactions carried out at the retail level in the hours preceding the official opening of the stock market, stocks show increases of 1%, consistent with the rebound they showed yesterday.

The recovery of Argentine stocks has several explanations. The first is that in recent weeks they had unexpectedly gone underground, which led them to go public under $ 20. From there, each breath shows a marked rebound.

The reasons for the rebound have to do with government changes and investor expectations that Sergio Massa’s start as super-minister will result in an adjustment of public spending which enables the country to fulfill the commitments agreed with the Monetary Fund.

The other reason for the rebound has to do with increases in global markets replicating in emerging markets.

In the New York premarket, Argentine newspapers rise around 1% this morning. The AL29 goes up by 0.92%, the AL30 goes up by 0.85%, while the AL41 goes up by 0.76%.

In any case, many of the bonds continue to trade below the value they showed before Martín Guzmán stepped down as Economy Minister on 2 July. Over the month, the AL29 lost 3.5%, the AL30 rose 0.3% and the AL41 fell 8%.

so far this year, Argentine bonds show losses of around 35%, which leads the market to assess that the country will have to face a new debt restructuring in the coming years, given the impossibility of seeking financing on global markets due to the high cost of country risk.

The JP Morgan indicator, which measures the excess cost of Argentine debt over the rate paid by US Treasury bills, returned 5.4% yesterday, a 2538 basis pointsalthough it has increased by 50% so far in 2022.

extended rally

“Yesterday, dollar sovereign bonds experienced another day of gains. Extending Wednesday’s rally, Argentine global bonds closed Thursday with increases of + 6.71 / + 10.47% along the curve,” Portfolio said. Personal Inversiones (PPI).

“The short end of the bond curve was the most favored. As a result, the weighted average price jumped above $ 23 and closed at $ 23.40, returning to June 30 levels. However, we are still a long way from the 33/34 dollars we started the year with“, they detail.

“What’s behind the rebound? Beyond the political signals a sustained rebound is unlikely to be seen without concrete fiscal measures to correct structural problems “, underline from PPI.

Yesterday, the rebound in bonds was accompanied by strong rises in Argentine stocks listed on Wall Street, which exceeded 10%. And at the same time the alternative dollars deflated, with falls of 12 pesos for the blue dollar, which closed at $ 314, and 18 pesos for cash with liqui, the dollar used by companies, which ended up in $ 322.

However, dollar sales on the official market and the Central Bank remained solid he had to give up $ 100 million for the payment of imported energy and fuel. Along this path, the monetary authority continues to have difficulty accumulating reserves and having the resources to control the evolution of the dollar.

AQ