Markets: dollar bonds have already accumulated 10 rounds in a row of losses and the country risk is close to 1,900 points

This Friday there are widespread declines in all markets

The Argentine stocks and bonds resume a bearish trend this Friday from the opening, in a market conditioned by the strong expansion of retail prices, whose December record was the second highest in 2021 and was above what was expected among analysts.

The index S&P Merval of the Buenos Aires Stock Exchange also reacts to the down 0.5% on Wall Street indicators, with a 0.8% loss, below 85,000 points at 11:30 am, with a notable drop in liquidity.

Meanwhile, they expand talks between the government and the Fund International Monetary Fund (IMF) to try to resolve a complex debt for some USD 45,000 million, of which some USD 4,000 million must be repaid in March and the Central Bank has practically no reserves to face it.

The dollar bonds chain their tenth consecutive fall and so far in 2022 they cut 10% in the average price. This Friday, Global bonds -in dollars with foreign law- yield 1.4% on average.

Argentina’s dollar bonds failed to recover prices in any of the trading rounds in January

Some issues, such as the Global 35 (GD35) and Global 46 (GD46) are trading below $29. Meanwhile, the internal rates of return of these issuances exceed 24% per year in sovereigns with foreign legislation, and 26% in titles with shorter-term Argentine law.

Meanwhile, JP Morgan’s country risk rises eight units for Argentina, to 1,873 basis points. The country risk scored a recent maximum close to 2,000 points on November 30.

An IEB (Invest in the Stock Market) report focused on “hard dollar” public securities and stated that “because the according to the Fund looks distant, these bonds are close to the minimum parity levels since they came out. Those with a current parity lower than last year’s low are seen as a buying opportunity. This is the case of the GD35 and the GD41, which in turn have a current yield attractive that protects them”.

Retail prices in Argentina increased 3.8% in the last month and climbed 50.9% in the previous year, despite government controls and the strict exchange rate trap that complicates the financial sector.

An analysis of Personal Portfolio Investments He emphasized that “inflation in 2021 climbed to 50.9%, being the second highest since 1992, behind 2019 -53.8% per year-. The rise from 36.1% was due to the strong monetary excess -supply exceeded the desired demand-, which was mainly consumed in the first semester -it averaged 3.8% versus 3.1% in the second-”.

“Inflation expectations for 2022 climbed to 54.8% in the December REM, rising for the fifth consecutive month from 42% in July. Consequently, the 2019 record would be broken.”, they limited from Personal Portfolio.


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