BUENOS AIRES, Nov 2 (Reuters) – Argentina stocks and bonds finished in positive territory on Tuesday encouraged by selective stance ahead of legislative elections to be held in less than two weeks.
A defeat for the ruling party in those elections could make it lose control of Congress, a situation that would tend to aggravate tensions within the ruling alliance, analysts say.
Strong inflation, which could exceed 50% this year, amid price controls and the exchange market, a growing fiscal deficit and slow negotiations with the IMF, create a panorama of uncertainty for investors, operators agree.
“Inflation in October was 2.5% per month and registered a year-on-year growth of 46.9%,” the consulting firm Orlando Ferreres y Asociados reported in a report.
Argentina made an interest payment to the IMF on Monday for some 390 million dollars of the debt that the country contracted in 2018 and that amounts to about 45,000 million dollars, at a time when it negotiates with the agency a longer-term restructuring and with lower rates.
“Argentina is not in a position to pay this debt in 2022 and 2023, so it has to renegotiate and restructure its debt so as not to go into default with the IMF. The meetings are part of the negotiations: there is time, there is no need to rush either”, affirmed Javier Timerman, partner of the firm AdCap.
* OTC debt closed with an average improvement of 0.3% on average, after accumulating a 3.4% drop in the previous three sessions, in a market led by the 0.7% increase in the ‘Bonar 29’ .
* “Potential improvements in ‘fundamentals’ are still undetected to seek to take advantage of the penalized parities,” said Gustavo Ber, economist at Estudio Ber.
* The country risk prepared by the JP Morgan bank rose two units, to 1,730 basis points towards the closing of the local market, after renewing its historical maximum of 1,738 units in the first part of the entries.
* The benchmark stock S&P Merval improved 2.07%, to a provisional close of 89,273.04 units, close to its historical maximum level of 90,576.75 points recorded last week.
* In the exchange market, the wholesale peso depreciated 0.06%, to 99.87 / 99.88 per dollar, with liquidity control from the central bank (BCRA).
* “The demand for foreign currency prevailed again in the development of operations, demanding new official interventions to compensate for the insufficiency of supply,” said Gustavo Quintana, operator of PR Corredores de Cambio.
* He added that “according to estimates from private market sources, the BCRA ended the date with sales for about 40 million dollars.”
* The weight in the alternative places operated around 180 per dollar in the so-called “Cash with Settlement”, at 179.9 in the “MEP dollar”, at 197.5 per dollar in the informal one and 215 units in the bilateral negotiation “Senebi”.
(Report by Walter Bianchi; With the collaboration of Hernán Nessi; Edited by Jorge Otaola,)