How does the city benefit from the collapse of the country’s risks?

The exchange rate has moved around $1,445 since the end of October. The drop in interest rates to 30%, which at other times would have put the market on high alert, did not generate a mass exodus into dollar positions. Quite the opposite. High-frequency inflation measurements were characterized by significant hysteresis The central bank (BCRA) has unwinded a significant portion of its foreign currency short position.

Low interest rates, declining country risks, and dollar settlement: the city is recalculating

Rocco Abalsamo, a financial advisor, summarizes the picture with a phrase he repeats to his clients. He added: “The dollar has managed to remain at these levels “We think it can continue at these levels for a longer period.”.

He adds to this definition a key point that the market listened carefully. The Argentine Treasury and Central Bank confirmed that they would not buy dollars As long as the demand for the peso does not improve. Abalsamo says that with this decision, doubts about the state’s competition with the private sector for foreign currency will be removed.

For its part, the US Treasury has already closed its repurchase program, another element that has muted pressures on the exchange rate.

The dollar has stopped imposing fear, and that single idea opens the door to a more balanced, diversified, and diverse structure Focusing on the real performance in dollar terms.

Long sovereign bonds

Once again, the Kings take center stage. he AE38 It has advanced nearly 16% in dollars since October 27. This movement reflects the sum of financial, political and external signals that mitigated the severity of the financial climate.

Abalsamo recalls that October’s financials kept the surplus intact and that an exchange stability perspective improved Argentina’s risk assessment. Legislative dynamics also increased the likelihood of approval of tax, labor, and pension reforms.

Martin tower, Balanz’s financial advisor offers a similar reading. “On the sovereign curve, Today, the biggest upside is in the longer term. “AE38 and GD35 are the ones that get the most miles if the country risk drops to 400 points.”. For Touré, this scenario would allow for an advance of approximately fifteen percent in hard currency. Its justification is technical.

The middle and short part of the curve has already included part of the improvement, while the long part is still lagging behind.

The long segment therefore focuses on the greatest potential for value appreciation.

The coincidence between the two consultants once again unites the message the city has been repeating for weeks. Duration risk is offset by the expected potential return. This difference makes long bonds the focus of profit in dollars without the need to take speculative positions.

New commitments are negotiable

Recent corporate issuances have revived the interest of conservative investors. on PLUS31 from Pluspetrolwhich launched last week, came out with an 8.125% coupon and today’s returns are close to 8.37%. This stream quickly became a favorite among profiles wise, Tori explains. “In terms of price and coupon, the new ones are the most interesting. The old ones are more expensive. The PLUS31 is very competitive in terms of real yield and credit quality.”

The other protagonist is Transportadora de Gas del Sur (TGSU2), With a maturity of ten years and a coupon 7.75% Which also leads close to 8% Which will be his bar TGS35. This alternative provides a long duration without sovereign fluctuations and with the perception of solvency that the market values in the context of normalization.

The two broadcasts share a quality that excites the city. They arrived at rates that still reflect the distrust of the recent past, but they were born into a dramatically changed scenario.

This difference between the exit environment and the current environment creates an opportunity that many advisors consider exceptional.

Current map of ONs

Inside the world of corporate bonds Hard dollar The local law, for MEP dollars, highlights the following:

IRSA 17 (IRSID) 5% coupon, yield around 5.4%, short duration and good liquidity.

YPF 25 (YMCQD) 5% coupon, 6.1% yield, solid source with up-to-date payment schedule.

CGC 34 (CP34D) 7% coupon, returns around 15%, perfect for a more aggressive profile.

CRISOD 38 (CS38D) The 8% coupon, yielding about 4.3%, is defensive within the corporate sector.

Michigan State University 10 (ROCAD) Coupon 8.25%, returns about 16%, higher risk, but good potential.

Central Port A (NPCAD) 7% coupon, 4.3% yield, a solid stop in a stable sector.

Techpetrol 7 (TTC7D) Coupon 5.98%, yield 4.2%, good credit quality.

YBF29 (YMCFD) 10% coupon, 3.6% returns, classic in-house.

LIPSA 6 (LIC6D) 9% coupon, returns above 23%, aggressive option.

360 Solar 5 (GYC5O/GYC5D) 8.75% coupon, returns over 22%, high yield alternative.

Genia 48 (GN48O) Coupon 6.25%, yield 7.7%, preferred in the renewable energy sector.

Vista Class 23 (VSCOD) The 6.5% coupon, 6.7% yield, is perfect to tie into the paper’s energy vision.

Pan American Energy 38 (PN38D) 6.5% coupon, 6% returns, high quality comp.

Camo gas 1 (ZZC1O) Coupon 7.95%, yield 8.4%, structured but with good credit.

Arcor 26 (RCCD) Coupon 6.75%, yield 6.8%, defensive within mass consumption.

John Deere Credit 18 (HJCIO) 8.5% coupon, 8.1% return, from the best international ONs issued locally.

Pampa Energia 22 (MGCND) The coupon is 5.75%, the yield is 5.4%, is solid and has an excellent payment history.

CEDEAR Earnings as a Defensive Barrier

Besides fixed income, the city maintains a clear preference for CEDEARs from companies that pay dividends on a sustainable basis. Coca-Cola, McDonald’s, JP Morgan, and American Express They top the list of top advisors. These names allow you to convert to the dollar without extreme volatility, obtain a stable income and reduce exposure to the local macro economy.

As for Absmo, the preference is towards Altria Group (month), Verizon Communications (FZ) and Pfizer (PFE), three companies with consistent dividend policies, stable flows and low volatility.

The logic is already well known, but in this context it acquires greater importance. Conservative portfolios need external stability, predictable flows, and permanent liquidity.

High-dividend CEDEARs meet these three conditions.

The three portfolios the city holds together, according to the investor profile

Of diagnoses Abalsam and towerThree complete wallets can be built.

Conservative Wallet: To sleep peacefully every day

The goal focuses on protecting capital and generating a stable flow of dollars.The backbone is in corporate and sovereign instruments with low relative risk.

Proposed composition

The strategy is mainly based on Plus31, TGS35, AE38 A lower percentage and CEDEARs of profits like Altria Group (month), Verizon Communications (FZ) and Pfizer (BF). Having zero local stocks and only companies with strong metrics e.g View (Vest). The role played by the long tranche of sovereign bonds is marginal, given that the focus is on stability rather than strong currency appreciation.

Expected result

A wallet like that It gains between 6% and 8% annually in dollar terms without major shockswith very low volatility.

Moderate wallet

This profile includes long dominions as a central element. The investor seeks appreciation in the value of the hard currency, but without giving up the solidity of the company.

Proposed composition

The portfolio gives more weight to AE38 and GD35, including PLUS31 and TGS35,CEDEARs total profits It reserves a small space for the banks it left behind. Vista Energy is also part of it due to its industrial strength.

Expected result

The potential, according to Toure, It ranges between 10% and 15% in dollars if the country’s risks decrease to levels similar to those in the region.