Unstable Argentine markets due to relocations awaiting legislative elections

BUENOS AIRES, Nov 12 (Reuters) – Argentina’s financial market showed mixed trends on Friday due to tactical rearrangements of portfolios pending the outcome of the legislative elections to be held on Sunday and that could cause the government to lose control of Congress.

Recent polls indicate that the center-right opposition would once again defeat the ruling Peronism in the November 14 elections, after a resounding victory in the September primary elections.

“This Sunday the mid-term general elections will be held and the market speculates the different possible results,” said Portfolio Personal Inversiones (PPI).

He added that “the results of the Province of Buenos Aires, the Autonomous City of Buenos Aires and the national aggregate will be a mandatory stop for all political analysis, especially to infer that it could pass for the 2023 (presidential vote).”

Amid doubts about the country’s political future, attention continues to be focused on the slow negotiations with the International Monetary Fund (IMF) for a millionaire debt, strong inflation, which could exceed 50% this year, and a growing deficit fiscal with monetary issue.

“There is a lack of certainty as to what the government is going to do from here on out,” said economist Fausto Spotorno.

* The S&P Merval stock index of Buenos Aires lost 2.45%, to 93,595.87 units, at 12:40 local time (1540 GMT), after a bullish start and marking an intraday historical maximum value of 97,024.42 points this week.

* The Argentine country risk prepared by the JP Morgan bank rose seven units, to 1,751 basis points, compared to a record level of 1,753 units noted the day before.

* Bonds in the OTC market fell 0.2% on average due to persistent portfolio disarmaments due to short- and medium-term economic doubts despite attractive returns.

* In the exchange market, the wholesale peso fell a slight 0.01%, to 100.22 per dollar, thanks to the permanent liquidity regulation imposed by the central bank (BCRA).

* “We believe that, given the excess of pesos and the high demand for dollars, under these levels of uncertainty and mistrust, something has to happen in the real exchange rate,” said PPI.

* “For the most part, there seems to be a consensus that this should happen, but the dilemma is whether it will be a devaluation of a jump or through an acceleration of the movement of the official exchange rate – surely accompanied by a rise in rates,” he said.

* The currency in the alternative markets operated at 187.1 per dollar in the so-called “Cash with Settlement”, at 185 in the so-called “MEP dollar” and at 215 units in the bilateral negotiation “Senebi”.

* On the other hand, in the informal market, 204 units were recovered, after reaching a historical minimum value of 207 for sale the day before.

* “The focus will be on both the final numbers (of the election), which will define deputies in all provinces as well as the results in the eight provinces that elect senators, since if the STEP figures were repeated, the ruling party it would lose its own quorum in the Senate, “said the SBS Group.

(Report by Walter Bianchi; With the collaboration of Hernán Nessi; Edited by Jorge Otaola)


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