Markets: Argentine shares rise 6% on Wall Street amid expectations of Senate passage of Basic Law

On a pivotal day for the government of a libertarian president. Javier Mileyto appeal to the Senate “Law basics” and the tax package, the stock market performed markedly better even in a cautious business context.

Leading index S&P Merval Buenos Aires Stock Exchange increased by 1.5% to 1,568,096 units.in a trend driven by improvements in financial and energy stocks after falling 2% the day before and rising 3.8% on Monday.

Among ADRs and shares of Argentine companies that are traded in dollars on Wall Street, the growth is due to Banco Supervielle (+5.9%) and Grupo Financiero Galicia (+5.5%).

We need to “go beyond the Bases Act, which is sure to come, but it’s a short-term stimulus,” he commented. Christian Lopez, Portfolio Personal Inversiones Analyst. “You must follow basics this can tell us that things can really change in the long term, after so many years of decline,” he said.

Among thousands of demonstrators protesting the bill, the Senate debate promised a very close vote on stock market shutdowns as the ruling party has few lawmakers in the upper house and has failed to convince the majority of the benefits of the reforms.

The ruling party had very few votes to approve both initiatives, as it is currently expected to receive only 36 votes.

“Definitely, There is nothing left to do but wait for the development of the day’s events to contemplate the result. this story. Chief today drivers Argentina’s assets are a package of measures promoted by the current administration. Failure in the Senate will create an even more serious problem with political, economic and social consequences that are difficult to foresee,” they assessed in Portfolio Personal. “In this context, unlike emerging markets, sovereign debt hard dollar “were unable to maintain a favorable tone,” they added.

Argentina’s dollar bonds rose an average of 1.7% on Wall Street. country at risk JP Morgan, which cut 41 units of production for Argentina, 1484 points basics at 5:20 p.m.

On the other hand, this Wednesday the Treasury resumed large peso maturities by issuing three names of Lecapa. Treasury captured $5.4 billion by placing only new Lecap S13S4 bonds, successfully extending the maturities corresponding to S14J4, leaving the S12L4 and S16G4 placements void. The proportionality coefficient was 43.266%. As stated in the tender conditions, TEM The cutoff (monthly effective rate) was 4.25 percent.

In an official statement, the Ministry of Finance assured that “ the process of negative real rates has come to an endfulfilling the dual purpose of contributing to the cleanup of BCRA’s balance sheet and being a fundamental pillar in reducing inflation during these six months of administration.”

“The decision comes after several months in which the government has relied on a negative real rate to reduce the real supply of the peso, although we continue to await future inflation records and future decisions from both BCRA via reference and the Treasury via confirmed bid rates to evaluate the changes announced by the government,” he explained. Juan Manuel FrancoChief Economist of the SBS Group.

Another positive fact that contributed to the growth of assets in the domestic stock market was the growth of the main Wall Street indicators after the announcement North American Inflation Data, following the acceleration recorded in the first quarter.

Headline U.S. inflation was 0% for the month in May, slowing from 0.3% in April, pleasantly surprising analysts who were stuck at 0.1%. The decline in energy prices (-0.14% monthly) was a key factor in consolidating the downward trend. In particular, fuel prices fell by 3.5 percent.