ADR moderates euphoria after approval of the Basic Law; bonds earn up to 6%, and country risk falls by almost 70 points

The market is showing enthusiasm in the segment fixed income with growth close to 6% (AL41). Within this framework Country risk falls 68 units (-4.6%) to 1,416 basis points after initially easing to 1,382 points, a nearly two-month low.

Regarding variable income, After a euphoric start, ADR growth in Argentina has moderated. Progress in the middle lead Supervielle Group (+6.3%). They follow him from behind Central Puerto (+4%); IRSA (+2.8%); BBVA Bank (+2.5%); and Edenor (+2.4%).

Meanwhile, S&P Merval rose 1.6% in pesos. As in New York, the main improvement is observed in Supervielle (+9%).

The base bill was approved after lengthy debate. When voting on each article separately, approved by RIGIwhich provides an extensive list of benefits for companies wishing to invest in Argentina, but Some items in the budget package did not receive a majority of votes.such as an increase in income taxes.

Market view

Finally, the draft Basic Law was approved in the Senate, which the market was eagerly awaiting. “We consider what happened in the Senate early this morning to be positive, given that most pieces of legislation were approved with relatively mild changes,” they said from Balantz.

“We believe this scenario is positive for prices and we could see GDP growth of around 3-5% during today’s session. If MPs succeed in insisting on the original earnings formulation, we believe prices will reach recent highs. again.”they noted.

For our part, for Delphos Investment It was logical that Merval took a break from the upward trend amid uncertainty, but they foresee a new rebound after the vote in the Senate. “It wouldn’t be surprising if the Merval returns to its range ceiling. and if we follow the market’s pre-ruling logic, we could expect the index to break this sideways path and rise above the $1,350 ceiling. But that would mean a 13% increase, so if that happens, it wouldn’t be surprising that I know more than one wheel,” the subject clarified.

Regarding the fiscal package included in the Basic Law, he emphasized the approval of money laundering, which could provide resources and foreign exchange on an ad hoc basis. On the contrary, the Government has not reached a consensus on reducing the non-taxable minimum income tax and increasing the lower limit for personal property.

Aurum Valores foresees the likely impact of the pension increases proposed by the opposition in negotiations over the profits and personal assets of deputies.. “Let us remember that the government criticized the vote on this formula for creating costs without providing resources, which MPs can now use to their advantage to move forward with the original formulation of the project,” they explained.

Waiting for inflation

Indec will announce national retail inflation data for May this afternoon. Consulting firms taking part in the BCRA’s latest Survey of Market Expectations (REM) estimated the price change to be around 5%.