“Coronacrash”: Argentina, at the top of the markets that have lost the most during the pandemic

More than 1.3 million people affected, of whom 70,000 died in a total of 175 countries within three months, are some of the numbers that clearly show the impact that the global coronavirus pandemic is having.

According to the Rosario Stock Exchange (BCR), “it is one of the biggest health crises in recent years, the consequences of which are still unpredictable.”

Among them, the so-called “coronacrash”: it is the name that receives the collapse of the financial and capital markets, which has been until now one of the largest in history.

“Since the global financial crisis of 2008, product of mortgages subprime, such abrupt movements were not observed in the main world stock indices. Until today, such an international event had never been triggered that had an impact on the stock indices jointly and to such an extent. Which shows us that the Covid-19 is charting a historical event, ”says the BCR in a report.

Evolution

The report, prepared by economists Julián Zubilliaga and María Jimena Riggio, analyzes how the Argentine Merval and six other major global stock market indicators evolved: the S&P 500 (United States), the SSE Composite Index (China), the Ibex 35 (Spain), the Bovespa (Brazil), the DAX (Germany) and the Nikkei 225, Japan.

As a first conclusion, the data shows that the spikes in monthly stock declines occurred in 2008, after the bankruptcy of the investment bank (Lehman Brother), and now, due to the pandemic.

If we observe the monthly drops, in Spain and Brazil March 2020 was the month with the greatest collapse of the century. In the United States, it was the second worst after 2008.

In Argentina, the loss of 30.2 percent of the Merval was the third largest in recent years. And the first was not October 2008, but much more recent: the collapse after Alberto Fernández’s victory in the August primary elections last year.

Now if the ranking It has been produced since the first cases of coronavirus began in China, in early 2020, Argentina leads the losses by a wide margin, with a cumulative loss of 41.5 percent.

“If we consider the high changes in the purchasing power of our currency, the difference would be even greater. Considering monthly inflation in March similar to that of February, the yield in real terms would drop to -45 percent in three months. A truly worrisome figure, ”says the analysis by Zubilliaga and Riggio.

Argentina is above Brazil and Spain, whose health situation is worse than the local one.

On this point, the researchers recall that Argentina’s problems exceed the crisis caused by Covid-19. The problem with debt and a possible default They are the other negative factor that the country finds in the markets.

“Clearly, the market is punishing Argentina, not only for the global pandemic, but also for the uncertainty generated as a result of its debt restructuring process, not yet resolved,” they review from the BCR.