Markets: Argentine stocks fall up to 8% on Wall Street and bonds rise, in the framework of negotiations with the IMF

Argentine assets exhibited a price recovery at the beginning of December

Argentine stocks and bonds went through days of extreme volatility. After a violent price cut in the final stretch of November, stocks and bonds experienced a significant rebound in prices between Wednesday and Thursday.

This trend can be framed in a kind of adjustment after the 8.5% average decline in dollars during the previous month, both for fixed income and for variable income.

In the case of shares, they are still trading 12% below their maximum prices in pesos of the week prior to the legislative elections. Dollar bonds, meanwhile, rose 7% from their price floor last Tuesday.

This Friday, the Argentine Stock Exchange took profits after the upward trajectory of the first two wheels of December, when selective buybacks of positions were noticed at the awaiting a prompt agreement between the Government and the Fund International Monetary Fund (IMF) to establish a looser payment schedule for the bulging debt.

The leading index S&P Merval fell 1.3% to 86,359 points at the close, after rising more than 10% in pesos in the previous two business sessions. The Merval came down 3% at 2pm.

It is worth noting that in the week prior to the legislative elections, the leading panel of the Stock Exchange scored a nominal historical maximum of 97,024 points, which implies that the Merval is still more than 10,000 points or 12% below that record in pesos.

At 5:00 p.m., at the close of the local Stock Exchange, the ADRs and Argentine shares that are traded in dollars on Wall Street they discount up to 8%, with the papers of Banco Francés and Globant in front.

“Taking into account that a possible agreement with the Fund (IMF) is latent, financial actions could consequently have a significant increase in their prices, with this sector being the largest holder of private debt.” Ayelen Romero, Account Executive of Rava Bursatil.

Gonzalo gaviña, financial advisor to Portfolio Personal Inversiones, commented that “Argentina is spending high volatility days and any news – positive or negative – affects the market. We have one visit in washington this weekend in which the Government will try to reach an agreement with the International Monetary Fund “.

“This was well received by investors and it was also reflected in the strong increases that were seen within the leaders panel. A small hope strongly moves local assets, both in equities and fixed income. ”, Graviña said

In the external context, the operators analyzed a lower-than-expected employment figure in the United States, which would be driven by a bullish start in the stock market.

The announcement of meetings with IMF officials scheduled for this weekend gave a turn to the movements of the stock market

On the last trading day of the week, the bonds Global of the exchange -in dollars with foreign law- were negotiated with important 2% average increase, to accumulate an improvement of 7% in the last three days.

In that context, the risk country of JP Morgan, which measures the differential of the return rates of US Treasury bonds with similar emerging issues, loses 46 units for Argentina, to 1,771 points basic.

“Signs of rapprochement in the negotiations with the IMF would be activating tactical betting by operators oriented to the trading in search of taking advantage of a technical rebound in the face of this expectation “, explained the economist Gustavo Ber.


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