Country risk falls 70 points, bonds rise and Argentine stocks soar 10% on Wall Street

Argentina’s stocks responded with strong gains early Thursday after the National Senate approved the Basic Law and Fiscal Package. Debt securities showed strong growth of 4% and Shares of Argentine companies listed on Wall Street rose 10% led by the banking sector. Country risk decreased by 66 units. for Argentina, in 1415 points basics at 12:10 p.m.

The reaction was predicted by experts. “We hope that the Senate’s approval of the Basic Law will result in today’s rally. To what level? This is very difficult to determine and we don’t think it is as easy as predicting previous highs, but it is certain that “It will be able to reduce losses caused by the uncertainty of recent weeks”provided for the consultant’s daily report Release.

“We will also have to see how the market accepts the changes, especially those made in the budget package, which may cause some recent announcements to end And extend the wait a few more weeks until it is determined again by MPs,” the report added.

Index S&P Merval Buenos Aires Stock Exchange up 1.8%, 159,000 pointswhile among ADRs and shares of Argentine companies traded on Wall Street in dollars, the growth reached up to 10%, with Banco Supervielle ahead, followed Edenor (+8.5%).

Senators’ votes were also added to investors’ considerations by the central bank’s announcement yesterday that it would fully resume the currency swap agreed with China, deferring by one year the maturities of US$5 billion due in June. and July.

“We regard what happened this morning in the Senate as positive, given that most articles of the laws were approved with relatively mild changes. Although the rejection of the mineral extraction tax reforms generates noise, it is worth noting that they were rejected by a simple majority of votes, so deputies can, by a simple majority, insist on their original formulation. On profits, Patagonia’s senators voted against it and their MPs engaged in similar behavior when they voted in April, so we hope the government can change that,” he said. Ezequiel ZambaglioneHead of Research at Balanz Capital.

“As for other changes, they a priori seem marginal and should not significantly change the government’s program. We believe this scenario is positive for prices and we could see global prices rise by around 3-5% during today’s session. If MPs manage to insist on an initial earnings report, we believe prices will again reach their recent highs,” Zambaglione added.

“The market had great doubts about the resumption of the Chinese swap and whether the government could approve the Basic Law with just six senators. Once these doubts are cleared up, even with a nuanced law very different from the original, the wheels on Wall Street will begin to grow,” he said. Mariano Marco del Pont from Silver Cloud Advisors.

“Beyond the importance of the fiscal package and its regime in particular, anticipation was focused on the approval of the Basic Law as a whole as a sign of political support,” agreed the economist. Gustavo Behr. “Such approval, coupled with the resumption of the swap and the anticipation of steps being taken towards exiting the shares, may once again cause a positive reaction among operators, especially after the recent profit taking,” the specialist added.

Between Sovereign bondsThe main movements of securities regulated by the New York Law were highlighted, which, as a rule, were the first to react and were most tied to the sentiments of global investors.

Investors appear to be putting aside mistakes in the specific approach to the budget package. And they may have good reasons.

“22 articles that changed the income tax and property tax of individuals were rejected. However, since the refusal did not reach two-thirds, the ruling party will have the opportunity to restore both taxes when the bill returns for reconsideration to the Chamber of Deputies, where the remaining amendments must be ratified,” the deputy explained. Mariva Research.