Argentine assets rise driven by better Climate after new YPF Swap Proposal

Globe Live Media, Tuesday, January 26, 2021

Argentina’s shares and sovereign bonds closed higher on Tuesday on the back of a better investment climate after state-controlled oil company YPF improved its debt swap offer by about 6,200 millions of dollars.

Operators agree that doubts about the future of the country’s economy persist at a time when the Government negotiates an agreement on extended facilities with the International Monetary Fund (IMF).

“The positive reading left by the improvement in YPF’s debt swap proposal triggered a recovery among domestic assets, especially ADRs, even though global risk appetite continues to ‘wait and see’ after the new Wall highs Street”, said Gustavo Ber, from Estudio Ber.

He added that “said reaction shows the importance that operators give to signals that aim to clear up political and economic uncertainty, as well as progress in negotiations with the IMF, since they recognize that valuations continue to be punished.”

The Buenos Aires S&P Merval stock index rose 4.2% to a provisional close of 49,463.84 units, led by the 10.26% improvement noted in the shares of state oil company YPF. For its part, YPF’s shares in New York rose 9.27%.

Roberto Geretto, an economist at Banco CMF, said that in YPF’s new offer “the discount rate (exit yield) is the great unknown, where with sovereign bonds yielding 15/16% it makes it more difficult than YPF’s new ONs debut with rates lower than 14% “.

Sovereign bonds in the local OTC market improved a slight 0.1%, where the reference security “Bonar 2030” -AL30D- fell 0.3%.

The country risk of Argentina prepared by JP.Morgan bank remained stable towards the close of the local market at 1,433 basis points.

“Despite the high levels of yields offered by Argentine securities – in a global context of low rates – investor interest remains low,” said Portfolio Personal Inversiones.

He added that “the main positive catalyst from which stocks could ‘grab’ in the short term for a significant and sustained rebound would be an eventual agreement with the IMF.”

The peso in the wholesale exchange segment depreciated 0.13%, to a closing historical low of 87.01 / 87.02 per dollar in a market with liquidity regulated by the central bank (BCRA).

“Private market sources estimated that today’s negative balance for the BCRA was in the order of 80 million dollars,” said Gustavo Quintana, operator of PR Corredores de Cambio.

In the alternative markets, the peso was traded at 150 units per dollar on the ‘Cash with Liquidation’ stock exchange (CCL), at 147.1 on the ‘MEP dollar’ of the Electronic Open Market (MAE) and at 156 units per dollar on the marginal circuit.