Argentine SHARES in New York lose 60% during March

Far from falling from highs as with Wall Street, local stocks remain low. Debt and possible downgrade would prevent increases

There was a phenomenal rebound from world markets on Tuesday with Wall street leading a solid 11% rise, the highest since 1933. Of course, that abrupt rise was accompanied by Argentine assets listed on NY (The local plaza will only start operating again this Wednesday).

Although increases of up to 16% were seen, the local papers – like the rest of the market – continue to be extremely punished in March, the month where the coronavirus pandemic “exploded” for the United States (a country now that could be the new focus worldwide) and where the situation became more traumatic in already complicated countries such as Spain and Italy.

For Argentine stocks, far from the record highs Wall Street was at before the debacle, the pandemic of the coronavirus was the final thrust.

There are papers that fall up to 58% in the month and in dollars, a percentage higher than the average of the 30 leading stocks listed on the Dow Jones index.. The top five of the bruised so far this month is as follows:

America Corporation it is worth $ 1.70 and yields 58.6%.

Take off, clearly affected by the fall in tourism, slides 57.4% at $ 5.10.

YPF, also hit by the drop in oil, it is trading at $ 3.90 and yields 50.80%.

Cresud it yields 47.1% and its share is worth US $ 2.54.

IRSA it loses 42.6% and is quoted at $ 3.15 for each paper.

The collapse of prices, which in the Argentine case was far from highs, reflects the old idea of ​​whether you are closer to the ground and therefore there is an opportunity to buy or whether you still do not have to grab “the falling knife.”

On the side of the optimists is Ariel Sbdar, Head of Strategy at Industrial Bank (BIND). From his Twitter account and despite the fact that the market sentiment is still clearly negative, the trader continues to think that these are very cheap prices for Argentine assets.

A drop as violent as the one we saw these weeks does not recover quickly. The key now is to understand if this is a one month stop and we start again (although slower) or we will be with this topic for several months“he says, referring to global markets.

For Delphos Investment, there is still an open end, both for the market crash and for the coronavirus. “Today the data and history are not enough to articulate a sufficiently robust, convincing vision. It is as if they were no longer optimistic and pessimistic, there are no longer so many honest and firm opinions. The volatility remains very high, and without anchors (that central banks are trying to provide, today with the Fed in the spotlight) things will continue like this, “they say.

Market specialists also say that what happens in the world, Argentina amplifies because it has its own problems: two years of recession (which will be three with this 2020) could be added the default of external debt.

The country is on the ledge with a restructuring that will be aggressive in a very bad market context with the possibility of a default on the payment of the securities (Martín Guzmán already warned that there was no more margin to pay debt with the reserves).

A country flirting with default clearly does not help attract investors, financial or real. In the case of the actions, in addition, they will have a double impact. It is rumored that the MSCI (The body that rose from the category of “Border” to “Emergent” to the Argentine papers in April 2019) has everything ready to send the country back to “C”.

The company (which has nothing to do with the bank Morgan Stanley) announced at the end of last year that it will maintain Argentine stocks in its emerging market indices, although he warned that he could eliminate the country in 2020 if capital controls continue.

Obviously the stocks He came to stay for a long period of time: he said it Miguel Angel Pesce, the president of the BCRA, and Guzmán in his last presentation to investors last Friday.

By volume, in addition, the Argentine papers do not have much space in the index and it is believed that in a short time they will launch a new query to “delude” the country from the emerging world and return to being border.

This is why, although at the price level, Argentine papers are “gifted”, it does not seem that they are still a medium-term purchase option. Getting over the debt and when the world will begin to normalize due to the coronavirus will mark the spirits of investors for local companies. For now, “it rains wet.”

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