Tuesday , March 28 2023

Surveys and the football scandal: tough combo to hit Argentine bonds


The Argentinean bonds had another day to forget, which led to country risk other again & # 39; & # 39; over 700 basis points, after an increase of & # 39; more than 2%. This evolution reflected the lack of & # 39; strong confidence that Argentina raised among investors Little imported package & # 39; USD 57,000 million. For markets, there are other reasons more b & # 39; health to avoid local assets.

The first two days of the week were a real blow to Argentine debt. There was a sharp drop in dollar bonds, both medium and long term. As a consequence, key cards had a sharp jump in the yield, which moves b & # 39; inverse way for the price. The majority of securities denominated in & # 39; dollars issued by the Government annually pay between 10.5% and 11% annually. These are very high rates, in contrast to the performance of the majority of Latin American bonds, which are located in the area of ​​5% to 6% per year (and f & # 39; very terms longer).

TheArgentina returned to "intensive therapy" in & # 39; vision of market terms. It was also generally weak day for stocks and the dollar was only "saved", Which slightly decreased after the departure of the last days, when it reached $ 39.90. It was after strong absorption & # 39; pesos made by the Central Bank, thus caused the rates stop falling.

What led to bonds suffer a new wave of & # 39; sales? Under – comments received Infobae with & # 39; brokers local and abroad, there are two fundamental reasons that have dominated the agenda in & # 39; these times:

1 – The survey begins to give Cristina Kirchner advantage over Mauricio Macrì, such as that known by the consultant & # 39; Aresco at the end of last week. For just a little difference in the first round, but also wins today in the vote. Just weeks, Poliarquía was reported on Wall Street 80% were convinced of the re-election of the current president and only 1% considered that the former president could & # 39; to return to power. But those percentages are sure to be varied. And that increased uncertainty is reflected in the cost of debt.

2 – The frustrated game on Saturday for the final of the Copa Libertadores, suspension and serious disturbances continued over bitter taste among fans & # 39; River and Boca. The scandal was news all over the world, but there were also many Argentine bankers to work in & # 39; Miami and New York. On the way back, past experience over the weekend. The message prompting operators debt was very difficult on the governance of the country a year remaining & # 39; and errors in the government crisis treatment.

The political uncertainty today is much more b & # 39; robust than fundamental, Which should lead to a price recovery. The disbursement of the IMF, for example, allows Argentina to stand out from the financial markets to at least the first quarter of 2020. Meanwhile, pay off debt maturing, both capital and interest. therefore, possession of & # 39; Argentine bonds will fall & # 39; on the part of large international funds.

But that increased availability & # 39; funds the Treasury is already facing debt in hard currency had no effect on the price of bonds. On the contrary, the risk of new country again & # 39; & # 39 rises; over 700 points shows a sustained decline. For that reason, nor was it relevant that the dollar again & # 39; drop & # 39; local market.

Among the most affected are those securities in the longer term. The Bonar 2046 lost nearly 2% and ended at & # 39; USD 76.40, at the beginning of the year was negotiating & # 39; over USD 100. The Bonar 2036 fell 2.2% and surrendered & # 39; over 10% per year in & # 39; dollars. The 2024, most conservative in theory, has superior performance to 11% and is one of those worse behavior in recent days.

Even debt over & # 39; short going into the doldrums. Both the bonds expiring in 2020 and 2021 suffered heavy losses and performance & # 39; more than 9% annually in & # 39; dollars. This is explained by fears that change will affect presidential Argentine debt. so Cristina Kirchner and Sergio MassaFor example, talked about the possibility of 're & # 39; negotiate "the agreement with the IMF. And doubts solving willingness to pay off debt in & # 39; event to come to power.

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