This investment that allows you to put pesos and follow the dollar, at risk

Experts warn that the new officer regulation could make it difficult to buy shares of foreign companies

With new measures to try to control cash settlement, the National Securities Commission (CNV) also will affect cedears operations, the preferred instrument of recent months.

Specifically, through General Resolution 843, the market regulator incorporated a 5 day parking for sale against dollars in the local market of assets (bonds or stocks) from abroad. It also established that when there is a mismatch between purchases of shares abroad and sales locally, the buyer will have to cover it by positioning itself in dollar bonds.

On the measure, Mauro Mazza, from Bull Market Brokers, stated: “In article 6 mismatch between local and foreign positions is prevented. This means that from having outside positions to be liquidated in 5 days versus local ones, in 48 hours, an imbalance is generated that forces you to buy dollar bonds to be adequate to what was bought abroad “.

Mazza and other operators who preferred the off the record agreed that this measure will affect the depth of the market and that it will be more difficult to connect the points of purchases and sales.

“This affects market liquidity. And the cedears will be affected over time. But a paradox occurs: the flow of pesos to cedears is permanent and the offer, with this resolution, shrinks. Therefore, this increases the price of yielding in pesos.“Mazza anticipated.

The cedears allow to buy in pesos shares listed on the New York Stock Exchange

“It decreases the market volume and makes the points between buyers and sellers more open. It will be more difficult for the stock companies to arbitrate with the genuine market, which is the United States“A market source said.

And he added: “The investor will find it difficult to operate because there will be fewer suppliers and demand for that product. It will not be so easy to arbitrate with the foreign market. Eventually, the holder can convert the transfer to foreign stock and sell it abroad

Regarding the exchange rate implicit in the operation with cedears, the analyst maintained: “The spread that is between the tips. The price, in any case, will follow the value of the cash with settlement by bonds. Yes, the cede operation will be very difficult for a retailer that does not have a previous position and then it depends to operate that the broker offers you a tip. That was arbitrated against the external market and it is going to be a bit more difficult. ”

Mazza also pointed out that there could be a rise in cash with liquidation in general. Given that the mismatch will be hedged with dollar bonds, the operator considered that, in the long run, the supply of those securities that are used to access foreign currency through the Exchange is restricted. “If this regulation continues there will be a cash rally with liquidation as soon as they run out of titles to deliver “he explained.

First effect: the spot with liqui fell

However, and as usually happens on the wheels immediately after a regulation, the first consequence of the new regulation was a fall in the stock market dollar. The counted with liquidation was especially affected by the new regulatory change and its listing lost 4.1% or $ 4.51 and closed at $ 105.49.

The dollar mepFor its part, it was coupled with the negative trend but had a more moderate fall. The retracement was 1.3% or $ 1.41 and the last value traded was $ 108.12.

“Cash with liquidation suffered a significant drop reaching minimum levels of the last two months after a new regulation by the CNV. To avoid the rise in the implicit exchange rate, the entity ordered that agents must net daily purchases and sales of bonds in the local market with cable settlement with those transactions in foreign markets, “said Portfolio Personal Investments (PPI).

The market regulator has already issued several regulations with the aim of curbing the stock dollar. However, the effect on price is usually short-lived.

The market regulator has already issued several regulations with the aim of curbing the stock dollar. However, the effect on price is usually short-lived.

And they added that today’s drop is related to the new restrictions while the dollar blue continued in the $ 127 zone, with a gap of about 80% regarding the official exchange rate.

In this line, Mauro Mazza pointed out that, after all the adjustments, there could begin to be “large dissociations between the different dollars of the ExchangeFor example, the one that is done with cedears higher than the one that arises from ADR and the latter higher than the one that is done with bonds. Basically, we have no more indicator of a dollar Stock Market and the blue price ends up being the only reference“, said.

For his part, the cedears have not yet acknowledged receipt of the new regulation. Unlike the cash with liquidation, the local certificates that represent actions from abroad today they recorded profits that reached over 6%.

Cedears: operators’ favorites

In recent months, lthe cedears concentrated a large part of the experts’ recommendations. Even, many recommended them as an alternative for the payment of the next Christmas bonus.

The main advantages detailed by the analysts were through the possibility of investing in pesos in companies listed in dollars the outside. In this way, you can place capital in a dollarized asset without having the currencies, in a context of currency stocks. Its price, in addition to reflecting the ups and downs of the American market, also closely follows the cash value with settlement.

Apple's bowing was one of the most operated on the last 40 wheels.

The yielding of Apple was one of the most operated on the last 40 wheels, with 6.6% of the volume

Another benefit of these papers goes through the possibility of getting out of the Argentine risk. While local bonds face the several times delayed debt renegotiation and Argentine companies weather the crisis caused by the pandemic, the Cedears allow investing in companies with no local risk.

The operators’ favorites are the roles of Barrick Gold, for being the easiest way to follow from Argentina to the price of gold, and the technology companies. Market volume reflects that preference.

According to the average of the last 40 wheels surveyed by the Argentine Institute of Capital Markets (IAMC), the most negotiated transfer was Barrick’s (8.6% of volume), followed by Mercado Libre (7%), Apple (6.6%), Petrobras (6.4%) and Microsoft (5%).

The CNV’s arguments

Sources close to the entity that regulates the market told iProfesional that cannot anticipate a behavior of the successive wheels of cedears in relation to this measure and They emphasized that this is an exceptional and ordering measure in the context of the pandemic crisis.

In the official statement, the head of the organization, Adrián Cosentino, argued that the regulations “are in line with the standard criteria for fixed income markets“and that the measures to regulate the activity of bond trading” constitute a common practice of every responsible regulator, making market development compatible with systemic stability“and in accordance with the economic dynamics.

“In circumstances of high volatility and complex economic conditions, regulators must assume a attitude of maximum rigor and full pragmatism in the constant task of regulatory calibration, in relation to how the financial intermediation activity, both banking and that of the capital market, develops, “said the president of the CNV.

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