Financial day: Argentine stock and bond prices soar on Wall Street amid investor optimism

This Thursday, the “planets aligned” in favor of financial investments in Argentina, leading to a significant recovery in stock prices, confirmation of the rise of debt securities and renewed weakness of dollars, alternatives to “equities”.

The positive trend started early and was based overseas as US stocks rose sharply following the company’s strong earnings reports. NVDIA (+15%), a symbol of the rise of artificial intelligence that has sparked a global rebound in major indexes and overshadowed concerns over the US Federal Reserve’s expressed caution about cutting interest rates. Technology index Nasdaq added 3% after presenting the results to the chip manufacturer.

Under this scenario, New York-listed Argentine stocks have picked up, having still had a negative balance sheet in February. Was profit up to 7% in dollars led by Tenaris, Transportadora Gas del Sur and YPF.

Shares of the Argentine oil company rose after UBS analysts raised their target price to $27 from $18 and upgraded their rating from neutral to buy. He also noted the growth Loma Negra (+6%) Earlier there were reports about the possible sale of a cement company owned by the Brazilian group Camargo Correa for $700 million.

Index S&P Merval Buenos Aires Stock Exchange rose 3.5% to 1,076,030 points

. The stock panel remains down 14.6% in pesos and 2.6% in dollars on a “liquidity basis” in February.

Sovereign bonds remained the best alternative of the month. Global bonds (in foreign dollars) rose an average of 2.6% on Wall Street. country at risk JP Morgan cut 72 units for Argentina. 1710 points basic, at minimum levels from April 2022. Sovereign bonds on the electronic open market (MAE) improved 2.3% on average in peso terms, with selective demand for peso and dollar denominations.

“The only cheer appears to be coming from dollar-denominated sovereign debt holders, who are optimistic about the economic correction that some analysts say is keeping the country from a possible external default,” the analyst said. Marcelo Trovato, Director of Stock Market Forecasting. “However, this financial assistance is not enough to assuage the concerns of a society that is watching in amazement as daily life unfolds under the leadership of a government that has so far failed to offer clear answers or tangible solutions,” he said. .

Argentina’s financial assets appear to be receiving support from investment funds thanks to an encouraging local macroeconomic outlook, which has simultaneously contributed to the dollar’s weakness in alternative markets.

The central bank’s money supply squeeze and the government’s brutal attack on the budget deficit have fueled optimism among savers, despite the president’s challenges. Javier Miley They multiply. “Signs of confidence are starting to emerge in favor of the new management, and in a small market like Argentina, any new purchase order will highlight price shocks,” he commented Reuters financial analyst from Buenos Aires.

Dollarization is the goal. We’re going to do it when conditions are optimal. We have gone from negative net reserves of $11.5 billion to minus $5.5 billion,” the Economy Minister noted on Wednesday evening. Louis Caputoin a television interview.

Caputo assured that “we will become better sooner than we think. And in two or three years we will be much better, and there will be no doubt that the efforts that all Argentines are making today, especially the middle and lower classes, will be surprised. I think the recovery, from what we’re seeing, will be very strong.”

Deputy Managing Director of the International Monetary Fund (IMF), Gita Gopinathis on a visit to Argentina and held direct meetings with President Miley as did Caputo to review the progress of the current $44 billion loan.

In January, the national government recorded its first monthly primary surplus in more than a decade and just recorded two straight months of favorable trade balances, thanks to the presidential administration in December.

“Since Miley took office, the monetary base has shrunk by 29.4% in real terms. In nominal terms, there was actual stability: growth was about 3% and reached a total of 10.4 trillion pesos. In short, an extremely contractionary monetary policy,” commented Eugenio MariChief Economist of the Freedom and Progress Foundation.

Behind the fall in the dollar exchange rate on the stock market are: Dollar MEP as ‘liquid funds’ close below $1,100-, He free dollar The decline deepened, this time by about 30 pesos, or 2.7%, and eventually settled at US$1085 for sale. The unofficial bill recorded a decline of 110 pesos, or 9.2%, in February, while profits earned at the beginning of 2024 fell to only 60 pesos, or 5.8%, compared with inflation estimated at 40% in this period. With the wholesale dollar up 40 cents to $838.30, the currency gap narrowed to 29.4 percent.

An increase in trading volume in the cash segment of the wholesale market by US$495.1 million – approximately US$100 million more than on Wednesday – contributed to the massive purchase of foreign currency from BCRA, which saved US$285 million 57.6% of the total amount was offered for their intervention. It was the largest cash purchase since January 12.

The central bank accumulated US$2.062 million in free foreign exchange market purchases in February, the fourth straight month with the balance in favor thanks to its interventions. On the other side, Booking This Thursday, international organizations advanced approximately US$207 million. 27.363 million dollars.

The central bank has completed in its third tender all US$2 billion of the second series of bonds for the reconstruction of a free Argentina (Bopreal

). As part of this tender, 655 proposals were received with a total nominal value of 1.126 million US dollars. “Because the proposals exceeded the maximum issue amount, the allocation mechanism used gave priority to the distribution of the first $500,000 required per company and then allocated the remainder in proportion to the amount required. So this is A total of US$560 million was awarded. which, added to the US$1.440 million raised in the first auctions, constituted the maximum quota for the series,” the company said in a statement.

In turn, Series 1 of the Bopreal project fulfilled the maximum quota of US$5 billion in the first six tenders. Next week will begin bidding for Series 3up to a maximum of US$3,000 million at par value.

The BCRA has enabled nearly 10,000 micro, small and medium enterprises (MSMEs) with registered debt of up to US$500,000 to access the free foreign exchange market (MLC) in a phased manner to pay all their obligations without having to sign up. Since the mechanism came into effect, more than 2,600 MSMEs have made import debt payments totaling US$80 million.