As financial dollars fall, more investors are encouraged to re-bet on pesos rates

Do you bet on the dollar or the pesos rate? It seems the eternal question of Argentine savers and investors. After the financial turmoil unleashed in mid-June, which triggered a peso run in July, market variables began to normalize last month and Investors have slowly begun to stop looking for hedges for a devaluation and to reposition themselves in pesos instruments.

With the relative stability of the exchange rate in August and the fall of financial dollars since the beginning of Septemberit appears that more investors are being encouraged to do what is known in jargon as “carry trade “or sell foreign currency to underwrite investments in pesos, from fixed terms indexed to bonds following the CER, and with the result of that investment buy back dollars in order to repeat the maneuver again.

After the financial turmoil in July, the local market variables began to normalize last month and only in August this strategy represented Gain of 3.8% for investors. As explained by GMA Capital economist Nery Persichini, it was the highest performance for this type of strategy in the past five months.

However, he warned that in the midst of severe pressure on exchange rates, the financial cycle It is not a sustainable strategy over time: “In the cumulative of 2022, riding the ‘financial bicycle’ produced a loss of 8.3%. And since the end of November 2019, the maneuver has resulted in a depreciation of $ 33.6 for every $ 100 invested”.

Far from the collapse they faced in June CER-adjusted bonds are once again attractive to investors. Only in the first three shifts of the month do they accumulate profits close to 7%, especially those with longer tranches, such as those that expire in 2024 and 2026, as well as the rise in rates in the debt market and the consequent reference increase in interest rates of the BCRA, once again focuses on pesos securities.

The persistence of inflation above 6% fuels this appetite for both bonds and index-linked fixed maturities. “The key in the short term for the return of carry and, above all, to be able to maintain itself, lies more in the stability of financial dollars than in a context of more attractive interest rates. The astringent monetary policy that the BCRA is developing is going in the right direction. management even if he arrived late “, warned Persichini.

In this sense, Adcap analysts say: “We believe that with the new economic measures, devaluation expectations will decline as the days go by. In this sense, we expect a decline in Rofex futures, and we estimate that if the scenario of a jump in the exchange rate starts to seriously clear up, Time to move from dollar-linked to CER-adjusted assets. “

Unlike other times, the carry trade strategy seemed to be a good option for all types of investors, this time analysts warn that its effect could be temporary and that, therefore, It is recommended for riskier profiles.

Pedro Siaba Serrate, of PPI, announced that the summer of cash with liqui could come to an early end and that this would put an end to the bonanza of pesos instruments.

“If the liquidation of soy does not live up to expectations, or in the event of a new stressful situation, the CCL would have room for a rebound. Thus, for a conservative profile, we prefer to keep only the necessary liquidity in pesos to manage the flow of payments and thus avoid foreign exchange risk, “he said.

“If an aggressive investor still wants to implement a carry trade strategy, we think the middle part of the CER curve (TX24) is a bold (but interesting) alternative to try to exploit the potential.the short-term summer“Siaba Serrate said.