Cautious Argentine markets, pending debt restructuring announcement

BUENOS AIRES, Apr 16 (Reuters) – Argentina’s financial markets operated with marked caution on Thursday given the investor’s expectation of the sovereign debt restructuring proposal that the government of the Peronist Alberto Fernández will make this afternoon.

Latin America’s third largest economy will present its proposal to international creditors to delay payments of bonds issued under foreign law for about $ 70 billion.

“The market expects to see the removal of (the bonds in the proposal),” said Martín Polo, economist at Mills Capital Group, explaining that you have to be vigilant about the grace period in terms of capital and interest to see the removal in net present capital.

* Argentina’s country risk, measured by the JP.Morgan bank, rose 19 basis points to 3,975 units at 12.40 local time (1540 GMT), compared to a value of 4,519 points recorded in mid-March.

* Sovereign bonds in the local OTC market rose 0.9% on average, in a speculative position led by improvements in longer-term and liquid dollarized securities.

* The S&P Merval stock index fell 0.64% to 31.65.96 units, after accumulating a 20% improvement in the previous four business sessions and losing 30% in March.

* “There is a lot of speculation in the market until Argentina’s proposal is known,” said one operator, stating that “we will see the reality of the market tomorrow.”

* The wholesale peso depreciated 0.18%, at a renewed record low of 65.7375 / 65.74 units per dollar, in a market regulated by the central bank since opening.

* The peso in the marginal segment operated at historical minimum levels of 100 units per average dollar, in a very small place given the quarantine ordered by the Government in the face of the coronavirus pandemic, operators said.

* The increase in the informal price of the peso implies a gap of 54.46% with respect to the price in the interbank market.

* The asset transaction known as ‘cash with liquidation’, a way of escaping capital through securities, given the strict exchange controls, operated around 109 pesos per dollar.

(Report by Walter Bianchi; Edited by Maximilian Heath)