2023-09-14 19:05:00
On Wednesday, September 13, INDEC released last month’s inflation data, with the monthly variation being 12.4% and the interannual variation being 124.4%. This last data reflected a considerable acceleration compared to the figure reported the previous month, which was around 6.3%.
August inflation was the highest since 2002, according to a statistical institute
Despite this, this month, theThe categories that showed the greatest increases were “Food and Beverages” and “Health”, having registered increases of 15.6% and 15.3% respectively. In this way, in the first seven months of the year, accumulated inflation is already at 80.2%, giving evidence of the complex dynamics in which the economy finds itself.
What to expect in the coming months?
Along these lines, the future outlook also shows signs that inflation will continue at high values.
Following the results of the PASO, and after the initial volatility in the dollar, variable income and fixed income assets, the Central Bank gave a strong message to the market, and among some of the measures taken, decided to raise the official exchange rate to $350 and until the next elections on October 22, making the decision to devalue the official currency by 22%.
In turn, the other measure announced by the entity that regulates the Argentine monetary system had to do with the increase in reference interest rates, which rose by about 2,100 basis points, setting the rate at 118.0% annually ( 209% annual effective).
From our point of view, The central bank’s decision to devalue the official exchange rate is undoubtedly already having an impact on inflationwhich registered an upward momentum compared to what had been the previous months.
What should be invested in?
Taking into account this complex scenario, where having pesos without investing generates losses of purchasing power, from the IOL Research team we consider that positioning in CER assets and in some assets that adjust for devaluation represent the best option to protect value against inflation (always considering the maturity dates and the investor profile).
After the alarming inflation in August, the Government recognized that September will also be high
Next, we are going to present some alternatives that we believe can be useful to boost your savings, while also allowing you to protect your capital against rising prices in the Argentine economy:
- Short term: For investors who want to invest thinking in the short term, which would be a little less than 6 months, we suggest investing in the National Treasury Bill X23N3 that adjusts capital by CER, thus managing to overcome inflation
This alternative would thus be able to maintain a performance with inflation and exceeding the fixed term. At the same time, it operates with a considerable volume and to date has an inflation yield of +3.31%. By investing $1,000 today, you would get about $1,250 at maturity.
- Medium Term (Option 1): Secondly, thinking about the medium term, we believe that it would be ideal to add a national bond to the portfolio. T2X4 that adjusts capital by CER, thus managing to overcome inflation. This bond maturing on July 26, 2024, also operates with considerable volume. To date it has a performance of CER +3,9%.
- Medium Term (Option 2): Also thinking about the medium term, we consider that it is a good idea to have a position in the TV24 National Bonus linked to the US dollar, thus creating coverage against devaluation.
This bond maturing on April 30, 2024 (228 days), operates with good volume and to date has a devaluation yield of -7.5%.
Actions as a hedge against inflation?
Finally, and thinking about an aggressive investor profile, who is also interested in investing in variable income assets, we consider that it would be a good idea to hedge against inflation by buying shares of Pampa Energy (PAMP).
It is one of the main companies in the Merval leading panel. Pampa is one of the leaders in the Oil & Gas segment, It has an approximate production of 5,5500 barrels of oil and 10 million cubic meters of gas per day.
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In addition, it participates in the generation and transmission of electrical energy, making it the largest integrated electricity company in Argentina.
In the results corresponding to the second quarter of the year showed an outstanding performance, increasing its profit by 156% year-on-year, reaching USD 166 million.
We understand that Pampa is a company that cannot be included in a portfolio, due to its solid fundamentals, but also because part of its income comes directly in dollars from exports, which positions it as an alternative to hedge against exchange volatility.
At the same time, so far this year it has worked excellently as a hedge against rising prices in the economy, and even against the rise of the dollar. So far this year, Pampa Energía shares have risen 174% in pesosa performance that is well above the accumulated inflation in 2023, and that has also been higher than the rise of the CCL dollar, which rose 115% in the year.
* Head of Research en IOL invertironline
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