Markets: the blue reaches a new high, bonds fall and country risk exceeds 1900

While the negotiations with the International Monetary Fund (IMF) remain truncated, Argentine assets fail to end the bad streak they have been going through since the beginning of the year. The country risk broke the ceiling of 1,900 basic points, while the bonds of the last debt swap continue to operate in negative territory.

This Tuesday, the country risk advances 25 units (+0.7%) and is positioned at 1910 basic points. This is the highest record since the debt was restructured in September 2020, ahead of the 1,898 that it reached at the end of November. Looking at the 2022 route, the index prepared by JP Morgan accumulates a rise of 213 basis points.

The escalation of country risk occurs as a result of the fall in sovereign bonds. Today is no exception. Abroad, the bonds of the last debt swap sink up to 2.6% (Bonar 2035); at the local level, the drop is up to 1.8% (Global 2046 and Bonar 2035). Since the beginning of the year, they have accumulated casualties of between 7% and almost 15%.

“The debt in dollars does not give respite. There was not a single positive wheel for the Argentine titles so far in 2022. The weighted average price of the global ones broke again with US$32 and is even below the floor of March of last year. The indicator plummeted to US$31.13 and is one step away from the post-restructuring minimums”, they observed from the Personal Investment Portfolio (PPI).

For economists, Argentina is still far from reaching an agreement with the multilateral organization. The key date will be March 21, when the country must disburse US$2,901 million to pay the Fund. “The Government prefers to delay the negotiation as long as possible before signing an agreement that may contain some disadvantage. However, this could be negative, since with an agreement, Argentina could have more of its financing needs covered for this year and receive investments that will speed up recovery. The market is not exempt from having months with high volatility ahead”, warned Ignacio Morales, an analyst at Wise Capital.

Two weeks ago, Economy Minister Martín Guzmán admitted that the lack of agreement is due to the fiscal path that Argentina will have to follow. In this regard, today the group of private bondholders Argentina Exchange Bondholders pointed to electricity subsidies, power cuts that were registered last week in the city and province of Buenos Aires, and to the sayings of Nobel Prize winner Joseph Stiglitz for his remarks about the “miracle” of Argentina’s recovery in 2021.

“Argentina’s differences with the IMF come down to the fiscal cost of providing almost free electricity in AMBA. People mine bitcoins at home, never turn off the air conditioner, and the system is without electricity due to lack of investment. Professor Stiglitz, why are creditors supposed to subsidize this ‘miracle’?

As for the stock market, today the S&P Merval operates at 84,110 units (-1.1%). In the Buenos Aires stock market, the shares of Loma Negra sank 3.9%, Central Puerto 2.2% and Transportadora de Gas del Norte 1.9%.

After yesterday’s holiday in the United States, today Argentine stocks listed on Wall Street (called ADRs) start the week trending lower. The biggest drop is for Pampa Energía papers (-3.8%), Central Puerto (-3.7%), YPF (-3.4%) and Grupo Financiero Galicia (-3.4%).

On the other hand, in the first business of the day the blue dollar climbs one peso and is sold at $210, the highest value on record. The gap with the official wholesale dollar ($104.18) continues to be above 100%.

The official retail dollar It is sold in the main banks of the country at an average of $109.52, according to information from the Central Bank (BCRA). The “solidarity” dollar, which has a surcharge of 30% in PAIS tax and 35% on Profit account, reaches $180.70.

In as much, the financial dollars register some disparate variations. On the one hand, the MEP dollar with AL30 bonds is offered at $205.53 (0.7%) and with GD30 at $205.20 (+0.7%). For the other, the dollar counted with liquidation (CCL) with AL30 appears on screens below $205.24 (-0.9%), with GD30 at $211.91 and with Cedears at $212.10 (+0.9%).