Financial day: As the government seeks to ease the reserve target, bonds rose and the free dollar fell

The Argentinian government is in talks relax the 2023 reserve target of the extended facilities program agreed with the Monetary Fund International (IMF), the novelty received a positive reception on the local market. On Monday, the free dollar fell, dollar bonds resumed their ascent and the Central Bank again bought reserves on the wholesale market.

The bone dollar foreign exchange obligations rose 1.9% on average, based on benchmark Global stocks traded on Wall Street. He countries at risk JP Morgan, which measures the spread of U.S. Treasuries yields with similar emerging issues, cut about 30 whole numbers for Argentina, for 1,966 stitches The essential, at 6:20 p.m.

Experts from Portfolio Personal Inversiones explained that “by far the most difficult reason for the change in the reserve target for the government at this stage would be, as one might imagine, drought. In this way, it would not even be necessary to order a to renouncer (sorry) to the Fund, the June disbursement would be even less jeopardized (nearly $4 trillion), due to the assessment of targets for the first quarter”.

“Ultimately, the modification of the targets This ends up being the common solution found by the Argentine government and the IMF to avoid a major default at the end of March,” they assessed from Portfolio Personal.

Frederic BroggiSales Trader of the IEB (Investing in the Stock Market) group, claimed that “debt hard dollar from Argentina, who had been punished a little, had a very good performance, accompanied by an improvement in the EMB (Emerging market bonds), which is the debt index for emerging countries. As has happened, when emerging debt falls, Argentina’s debt falls further. And now that it has increased, Argentina’s debt has increased much more. We believe that Argentina’s debt is a very good play in one or two years and that in the meantime it will be subject to the volatility of the EMB, at least until there is greater certainty concerning the elections, it is “played” a little because that the pre-applications are launched ”.

“In a year or two, the coupons will be collected and we assign a very low probability that there will be a restructuring next year, because the deadlines are short and it does not make much sense. And, precisely, the Current bond prices are more of a default or restructuring is ‘pricing’ (assuming pricing),’ Broggi added.

the analyst Salvador DiStefano He considered that Argentina’s debt in dollars offered a favorable alternative to investment even in a difficult financial environment such as the one we are currently experiencing. He recalled that “the AL30D (with Argentinian law) it is a bond that matures in 2030, but pays rent in the months of January and July, very small, but finally rent. The bond becomes spicy from July 2024 when it starts returning amortization, July 2024 $4 for every $100 of nominal, and from January 2025 $8 for every $100 of nominal”. This exchange security is quoted at around 28.70 USD and allows the investment to be recovered in January 2026, in two years and eleven months.

“It is essential for Argentina to recover its reputation, to obtain new credits and to manage the debt, to contract new debts and to cancel the old ones with an interest rate gain”, said Di Stefano .

“For dollarized walletssovereign bonds they have liquidity and because of the low parities may be a better alternative to dollar bonds related since the government will try to avoid a devaluation before the elections. However, this instrument is quite risky due to the volatility it presents and because if there is a run against the peso, it will have a direct impact on their price,” he pointed out. Juan-Manuel Valentifinancial asset analyst at Wise Capital.

For Mauro Natalucci, Account Executive at Rava Bursátil, “the bond market is suffering from Argentina’s short-term instability and government bond yields remain high. The required yield on bonds, inherent in the risk of default associated with foreign currency debt securities, had fallen at the start of the year, pushing prices higher. This happens since future cash flows are discounted at a lower interest rate, which makes the instruments less risky and therefore their market price increases.

Wall Street operated with slight gains in Monday’s session, with increases in a range of 0.2% to 0.6%more accentuated for technological papers.

The trend has infected Argentinian assets and among Argentinian ADRs, gains of IRSA (+5.9%), Cresud (+5.7%) and Banco Supervielle (+4.7%). index S&P Merval of the Buenos Aires Stock Exchange increased by 0.9%, to 250,465 points. The leading panel of the Buenos Aires Stock Exchange exceeded 267,000 points in January, a symbolic record.

The Treasury took 12,867 million effective pesos on Monday in the second round of a tender for bonds between market makers, the Economy Ministry reported. 30 bids were submitted, awarding a nominal total of 12,325 million pesos.

After the tender, “net funding has been reached for $402,822 million so far this year, implying a turnover of 139%,” the economic portfolio said. The Economy Department captured $332.4 trillion in cash in Friday’s tender.

In a session of the wholesale market with a traded amount of $335.7 million on the spot segment, the Central Bank ended its intervention on Monday with purchases for 33 million of dollars. “This is the highest purchase amount since January 13,” he said. Gustave Quintanaoperator of PR Exchange Brokers.

“During the conference, the entry of private funds for investment in productive projects was observed. The purchase of foreign currencies is only one of the factors affecting the level of the BCRA’s international reserves and the most important as a sign of accumulation and strengthening of monetary and exchange rate policy,” he said. the Centrale in a brief press release.

February net sales in the hands of the monetary entity reached $897 million. The negative balance extends to $1,089 million from the start of 2023.

On Monday, the “blue” companies to the dollar endorsed the lateralization line of the informal invoice, which reduced two pesos on sale, at 377 pesos. Thus, the free dollar has fallen four pesos so far in February, following a three-month run of increases above inflation between November and January.

The wholesale dollar, as usual on Monday, adjusted significantly higher and advanced 1.13 pesos to $195.81, cumulating an 11.1% gain in 2023. The official exchange rate is the one that increases the most: the exchange rate difference is reduced to 92.5%, after reaching 108% in January.

Ecolatina analysts explained that “given the inflationary trend indicated by the private measures for February, the monetary authority validated a creeping ankle faster January: during the week, the rate averaged 6.2% of the effective monthly rate, in line with last week, but above the average of 5.1% in January. In this sense, keeping the exchange rate falling in line with inflationary expectations is an indication that, at least for now, the government is not seeking to apply the traditional election recipe of slowing the pace of the exchange rate rise. official “. However, he does not foresee “that the delay is sought to be defeated, but rather to manage it. Therefore, the level of the real exchange rate will continue to be a function of excess demand for foreign currency in the foreign exchange market,” they said.

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