:quality(85)//cloudfront-us-east-1.images.arcpublishing.com/infobae/QETO7W2PVZBZNETVRIWDD3LETY.PNG "Financial day: After the announcement of the debt swap, stocks and bonds rose sharply and the free dollar fell 1")
He Argentina’s stock market reacted higher as the free dollar fell this Monday after the government agreed with the banks to swap debt in pesos, a measure that considerably lightens the maturity horizon for this year.
The main bankers and executives of insurance companies met this afternoon with the Minister of Economy Sergio Massawho underlined that the agreement “makes it possible to remove uncertainty by 2023” and assured that “the most relevant data of this call for tenders which is being launched, of this so-called voluntary exchange, is that it breaks with the idea that Argentina has a debt reprofiling on the doorstep every week”.
Banks that operate in Argentina hold much of the debt issued by the Treasury in the local market
The minister clarified that the operation will make it possible to outline a “much more orderly” maturity curve for 2024 and 2025 which deactivates “this idea of the bomb, that every two or three months something is about to explode and argued that “breaking through uncertainty about the ability of the state to finance itself in the domestic savings market for local debt was essential. All those ghosts are over.”
The leading index S&P Merval of Buenos Aires appeared at the closing with up 2.9% to 253,018 units, after falling 1.1% in pesos last week. Among ADRs and shares of Argentine companies that trade in dollars on Wall Street, bulls predominate, led by YPF (+6.5%, to 12.70 USD), Transportadora Gas del Sur (+5.1%) and Despegar (+5%).
Additionally, news is expected regarding a likely reduction in net reserve targets under the agreement with the Monetary Fund International (IMF), which would give the central bank greater margin to have foreign exchange to balance a foreign exchange market with intense demand from importers.
“It would be a way to make issuance more flexible for the redemption of securities on the secondary market,” they have since stated. Personal Portfolio Investments. “At first sight, the “potential” structure of the exchange is not so striking since it only covers the instruments until June -as they did in the previous exchanges, only the quarter-, but with the peculiarity of stretching duration with double bonds expiring in 2024/2025,” they commented.
Market operators estimate that the transaction could cover securities for some 9.8 trillion pesos (49.160 million USD), while financial sources told Reuters that details of the new securities adjusted for inflation (CER) or the devaluation of the exchange rate (dollar link).
For government, swap brings peace of mind, as analysts still warn of financial trouble
Dollar bonds rose 1.8% on average, as evidenced by the improvement in Global bonds -foreign law- on Wall Street. He countries at risk JP Morgan, which measures the spread of US Treasuries with its emerging peers, lost 44 basis points for Argentina, to 2,047 stitches Base at 6:10 p.m.
Sovereign bonds on the Mercado Abierto Electrónico (MAE) appreciated 1.1% on average in pesos, after gaining 0.9% on Friday.
“It should be remembered that a relatively orderly unwinding of peso debt requires fiscal prudence. Without it, the financial needs will be greater and the tension in the debt market will increase or, worse, the monetization of the fiscal red,” he said in a report by Invecq Consultora Económica.
“Since the debt that is about to expire before the election is unpayable (…) the best thing is to make a voluntary exchange and try to pass the maturities of this debt until the entry depending on the next government,” he said. Reuters Aldo Abramexecutive director of the Freedom and Progress Foundation.
On the other hand, the Minister of Economy announced this weekend the establishment of a special exchange rate to encourage exports from regional economies, which aims to strengthen the reserves of the central bank at a time when a severe drought hits the country’s exports.
In the external context, stock markets new York they acted cautiously and mixed closure in its main indicators, in a week in which the chairman of the Federal Reserve will speak, Jerome Powelland jobs data will be released that could decide the pace of future interest rate hikes.
The informally traded currency extended Monday’s loss to three pesos and closed at $372 for sale, its lowest value since January 16, seven weeks ago. The “blue” note maintains a gain of 26 pesos or 7.5% so far in 2023, which shows a behind inflationaround 13% since the start of the year.
With a big dollar gaining 1.06 pesos to $199.34, the exchange difference reduced to 86.6% after touching 108% at the end of January.
The Central Bank ended its foreign exchange intervention on Monday with sales for $42 million on the wholesale market, where 237.1 million USD were traded on the spot segment (place).
BCRA still registers net sales of USD 77 million in MULC in March and comes from net sales of USD 878 million in February, an all-time high for the second month of the year, due to lower agricultural sales due to Drought. During the year 2023, the negative balance of the Central in the MULC reaches 1,147 million dollars.
This Monday the “counted with liquidation” traded at $373 through the Global 2030 bond (GD30C), a price which, although a nominal all-time high, has been in a range of slight fluctuations since late January, but as as the wheel moved on, it ended with a drop of almost three pesos, $369.29, while the MEP dollar through the Bonar 2030 (AL30D) cut six pesos, to 360.97 pesos.
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