With the banks in the lead, the main panel closed July on positive ground. Optimism also reached the general panel, where there were increases of up to 60%
Julio was without a doubt the month of the actions. The peso equity market returned to trading important volumes and the shareholder panel was stained with positivism.
In that framework, the S&P Merval index advanced 27.3% in pesos and around 7% measured in dollars at the exchange rate calculated with settlement. Among the actions that make up this indicator, the roles of Grupo Supervielle (+ 48.9%), Cresud (+ 46.1%) and Grupo Financiero Galicia (+ 44.7%).
“You saw a lot of volume. It has been a while since you saw days with more than $ 3,000 million Equity operated. There’s a excess weight in the market that was turning, in part, to equities. So these returns, which are more than satisfactory, “pointed out from the Grupo SBS table.
For her part, Gloria Patrón Costas, analyst at Personal Investment Portfolio, stated: “The rise of S&P Merval has a lot to do with this changing expectations in the market, which understands that the difference between what the creditors present and the Government’s proposal is minimal and is compared to a very great cost to the country of not reaching an agreement”
“It was the month of the banks, the general panel and the mining companies. The market started the month very expectantly with a debt agreement that gradually faded with the passing of days. But it served to the banking sector had the expected performance. Is he most representative sector outside, especially Grupo Financiero Galicia and Banco Macro“synthesized Mauro Mazza, operator of Bull Market Brokers.
In line with what the analyst indicated, the ADRs of Argentine banks listed in New York closed July with important climbs. Grupo Supervielle was the one that stood out the most, with an increase of 30.9%. Galicia followed with a 23.7% rise, and Banco Macro (+ 14.7%) and BBVA (+ 10.4%) were slightly behind.
Beyond the leading panel, there was also strong increases in the general panel. They were led by role of TGLT, which gained 108.5% in the month and woke up a investigation at the National Securities Commission (CNV) due to its disruptive movements. But there were also good performances for the action of Boldt (+ 60%) and Irsa (+ 42.6%).
Mazza maintained that, with the delay in the agreement and the excess weight, “investors began to look for illusions in the general panel”
“Some companies, in dollars, were 90% or 95% down from the maximum and it was expected that, in this context of liquidity, collapsed dollar prices and unbridled optimism in the general panel, the flow will migrate to companies like TGLT, Boldt, Phoenix Global Resources, Longvie and Carboclor. They were produced like this irrational climbs that, although for underlying reasons they had to converge to high values, they should not do it that way, “he said.
Bonds, with a focus on trading
Fixed income, both in pesos and dollars, followed the pace of talks between government and creditors.
“In the dollar bonds there were increases of between 5% and 9% But, with all the debt swap, and especially in those of foreign law, there is a floor and a ceiling. They will move in line with these values, there won’t be surprising jumps because they have to do with the valuations and discounted flows of the new bonds. This is in line with the latest proposal“they explained on SBS.
“The prices of sovereign bonds in dollars were moving according to the expectations of a restructuring agreement. This past week the trend was more disparate. There is still very great uncertainty, “Patron Costas agreed.
The analyst differentiated the average raise, between 9% and 10%, of the advances according to legislation. “The Local Law bonds grew 12% or 14%, while those of foreign Law advanced more in the area of 6% and 7%. That is because the draft local exchange law has already been approved in the Senate and now we have to wait for the definitive sanction of the Chamber of Deputies. Instead, for the restructuring of foreign law the trend will depend on the decisions that are made“, he claimed.
On the performance of local currency bonds, from SBS noted: “In debt in pesos, the highlights were the Discount pesos (+ 29.8%) and the Pair pesos (+ 39%). They were favored by the announcement of the debt swap under local law. Anyway, the curve in pesos was quite good in the month, with increases between 4% and 10% “.
For his part, Patrón Costas highlighted the return on inflation-adjusted securities. “We saw better performance in middle and long part of the CER curve. That happened in the middle of the Treasury bids, which allowed him to roll over maturities and even allowed him to close with a positive balance of financing, “he said.
And added: “July was one of the most challenging months due to the number of maturities of bills., especially in the short term, and got renew 130% of maturities. This allows him to ease his gaze towards August a little. “
Follow the dollar linked boom
In July the business debt saga continued in pesos adjusted to the official exchange rate. In this sense, several companies placed bonds and were oversubscribed. Although the rates, due to that interest, remained low, in SBS dollar-linked loans stood out due to high demand.
“There were many highly demanded primary investments. The truth that there are pesos turning in the market and they begin to show the linked dollars as an attractive product, a bet on exchange rate coverage, given the current restrictions, “they pointed out at the SBS table.
And they highlighted: “There were some very outstanding broadcasts. Aluar’s this week was surprising: with a book of $ 60 million he had offers for $ 2 billion. There is clearly an appetite among investors. ”
At the end of the month, the wholesale dollar advanced only 2.6%, while the retailer gained 3.7%. Instead, the price of the Mep had an increase of 21.6% and the cash with liquidation rose 19.2%.
That scenario of high exchange gap, along with restrictions on buying dollars, explain investor interest in dollar linked bonds, since they use them as a way to cover themselves from the devaluation of the official exchange rate
While local stocks led the way in investments in July, interest in cedears remained. In this sense, Mazza emphasized: “The star is still the mining companies, especially Yamana Gold, which is a ‘junior’ mining company for the Argentine cedears, this means that it is very volatile with respect to gold. Local investors, Given the impossibility of investing in gold directly, they go to the mining companies. The offer in that sense abounds, we have 7 mining companies to invest in, “he assured.
However, the Bull Market operator warned: “The Cedears they are the preferred refuge, although we get tired of alerting that yielding is not an exchange hedge, although I replicated it very well, because there is underlying risk.
And he recommended: “If you really want to invest solely for replicate to the financial dollar They should not buy Amazon or Mercado Libre, but Coca Cola, Wal Mart, McDonald and companies like Gilead, which are very stable”
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