Effect of restrictions on the dollar: ADRs and bonds fell to 9.2%; country risk rebounded 5.5%

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In the Buenos Aires stock market, for its part, The S&P Merval index of Argentine Stock Exchanges and Markets (BYMA) lost 5.5%, to 42,167.86 units, the lowest in two and a half months. The leading panel went on to accumulate so far this month a drop close to 10%.

The most pronounced setbacks of the day were recorded by the papers the bank BBVA (-8.5%); from Grupo Financiero Galicia (-8.4%); Banco Macro (-8.4%); of Transportadora de Gas del Sur (7.9%); and Central Puerto (-7.6%). On the contrary, only Ternium (+ 0.5%) closed in positive territory. The volume traded in shares touched $ 1,500 million.

The new regulations, which establish more restrictions on the use of dollars for consumption abroad, purchases of foreign exchange for savings, exchange operations with bonds, and which also oblige companies to refinance debt capital maturities (operating between 15 October and March 31, 2021) accelerated the pessimism about Argentine assets, which were punished by widespread sales throughout the round.

Operators and analysts estimate that the new exchange scheme imposed by the monetary authority discourages operations and investment in the local market.

Despite the fact that the parking lot was released to sell MEP or CCL, which could generate a greater availability of pesos that are channeled into Argentine assets, “the measures imposed that restrict access to dollars generate aversion and deepen doubts on the part of the investors, leaving a constant feeling of uncertainty in the face of regulations that prevent a clear projection for the long term “, analyzed from Rava.

For his part, Fernando Camusso, director of Rafaela Capital, told Ambit than “Forcing companies to get financial dollars or to restructure obligations is the same as making a foreign exchange split official and making them go out via a higher dollar.”

At the same time, “Charging an additional 35%, even if it is on account of profits, is to impose a higher financial dollar, to prevent savings in dollars. This is equivalent to an officialization of an exchange split. That is, a whole series of batteries that they will tend not to show what really happens “, evaluated.

In Delphos Investment stated that “Nothing seems good for the prices of financial assets in the short term, which, although they have incorporated many of the existing bad news, lose their exit force in a negative short-term dynamic”, they affirmed

“We caution that initially these restrictions on individuals may act to discourage the demand for dollars, but over time the effect may be significantly less than anticipated by policy makers,” warned Banco Mariva.

In the same vein, from Portfolio Personal Inversiones (PPI) they remarked that “the measures that focus more on restricting the bleeding of dollars is real than expected, but perhaps under other actions. ‘to refinance maturities in dollars to companies, will add’ noise ‘beyond the measure to the market “.

“The market was already anticipating measures from the Central Bank and the Ministry of the Economy due to low reserves. Although we believe that what was announced yesterday (Tuesday) was worse than expectations”they added.

For some operators, the sharp drop in stocks – which showed that the path chosen by the BCRA was not the right one to stop the drain on reserves – was somewhat exaggerated and believe that the current weak prices measured in dollars may generate buying opportunities in the coming weeks.

Meanwhile, it went almost unnoticed in the local market the Fed’s signal to keep rates near zero through 2023, in line with analyst consensus. “I know that we are in our micro climate called ´Argentina, stocks and all its aspects´, but the FED has just announced that it will not move the rate until 2023. That is good for emerging markets”, said the economist Diego Martínez Burzaco.

Bonds and risk country

In the fixed income segment, the new Argentine bonds also suffered strong setbacks due to a marked aversion to risk after the exchange measures announced.

For example, the Bonar 2038 “D” subtracted 6.6%, the Bonar 2030 “D” fell 6.1%, the Bonar 2035 “D” lost 5.9%, and the Bonar 2029 “D” lost 5% , in a reduced place and offering business.

Thus the bonds issued under local legislation ended up with rates of between 12.5% ​​and 13.75%, above the returns shown in securities under foreign law, which closed with IRRs of between 12% and 13%.

Meanwhile, debt in local currency operated without a defined trend, to remain unchanged on average at the close.

With everything, Argentina’s country risk, measured by JP.Morgan bank, rose 5.5% to 1,181 basis points.

By last, Economy managed to capture about $ 93,000 million in the market, including discounted bills (at rates between 28.5% and 35.15% tna), debt adjustable by CER (at rates of 1% tna) and Badlar debt (at rates of 33.36% tna).

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