Wall Street banks now recommend investing in Argentine stocks and bonds

As expected, the approval of the Basic Law was marked by strong growth in the market and was also reflected in reports that Wall Street banks handed out to their clientshighlighting improving prospects and even recommending investment in Argentine assets.

The first to update investors on developments in Argentina was JP Morgan, which focused not only on the approval of laws that were discussed in the Senate yesterday, but also on the announcement that occurred during the meeting on the agreement with the People’s Bank of China. renew the swap and thereby clear nearly US$5 billion of maturities scheduled for this month and next. The news eased previous market tensions and contributed to today’s biggest gain since the voting results.

Although he JP Morganan organization that this week already praised the progress in economic matters of the leadership of Javier Miley, but emphasized the need to gain support in CongressBy maintaining a balanced and informative tone rather than judgmental, other subjects expressed more enthusiasm. This was the case, for example, with a powerful Brazilian bank Bradescowhich is practically urged investors to position themselves in local assets.

In this recommendation, one of the largest US banks, Bank of America. “Argentina: time to buy after strong correction in bond prices,” he titled his report, in which he emphasized that after the decline in recent weeks, The price of sovereign securities has already provided a buying opportunity, given that it was expected that “some form of legislation” would be approved and that it would be a catalyst for profit. He wasn’t wrong. Neither is betting that exchanges with China will finally be resumed.

The same concept of “opportunity” was highlighted by the Brazilian organization, which believes that “many investors have not yet settled in Argentina and are waiting for opportunities. “This could be a good option.”

According to Bradesco, the approval of the laws, despite the changes that legislators made to both projects, as well as the tension of the vote, meant a positive result for the government, among other things, because, despite the limited number of votes, the favorable development of the government’s ability to pass its first law , which was unthinkable three months ago,” was obvious.

In this sense, analysts of the Brazilian company stated that “The government is strengthening politically“What we felt was the most sensitive issue and also socially due to the high level of violence of the protesters, which was criticized by most political groups and which should strengthen the approval of the government,” he noted. Like the Brazilian bank, JP Morgan did not overlook the level of incidents that occurred outside Congress. Markets are taking note.

“Finally, on the macroeconomic side, the news flow should continue to be positive (inflation, fiscal policy, Chinese swap and IMF agreement), creating a positive dynamic in Argentina in which we do not rule out a narrowing of the exchange rate gap, led by better expectations. economic agents,” he concluded.

The view from global organizations is similar to that expressed by various local analysts, including Eric Rotandale, Puente’s chief economist, who added another element that will contribute to the upward trend: negotiations for a new agreement with the IMF, whose board will approve today. expected payout once first quarter goals are achieved. “The IMF Board will meet today to release US$800 million and publish its eighth review of the program, including relevant details and possible changes to the exchange rate and monetary system. In light of these positive developments for sovereign lending in the coming weeks, bonds could regain ground lost in May when delays in the legislative package weighed on valuations,” the analyst said.