After the November election celebrations Calm has returned to the market, which has not been seen for months. The month closed with the stability of the exchange market, Relatively low country riskA slight increase in the Merval index and a normalization of the level of peso interest rates. Looking forward to the last month of the year, investors They are waiting for political signals from Congress And a greater definition of the financial strategy that Luis Caputo will use to address debt obligations next year.
Although the gains in the past 30 days were more moderate than those achieved in October, the positive signal at most stop points encourages investors to consider a new cycle for this month. “As a result of the result in favor of the ruling party at the polls, Shares had just recorded a 74% rise in dollar terms. While bonds strengthened 18% in hard currency. However, the market tone remained positive in November, with the overall advance in debt, supported by country risk pressure and lower real interest rates.
The last treasury debt tender in which the Ministry of Finance participated It was able to renew more than 97% of maturities It serves as a positive sign of what may happen in the last month of the year.
However, the development of reserves and the future of the exchange rate system It remains the focus of investors’ attention. “The debate over the exchange rate and its regime remains latent, despite the greater post-election calm in the exchange rate, which was reflected in the futures market,” consultancy LCG noted.
Although the exchange rate remained stable from the end of the month to the end, in the last two weeks it has accumulated an upward trend. “Treasury purchases of dollars in the MLC agreement They didn’t even reach $200 million in November (Plus about $1.1 billion in purchases from BCRA), which is not the reason for the rally in recent days. On the other hand, the tight dynamics of reserves may be an important factor in limiting the decline in country risks, as happened after the agreement with the IMF in April.
Even with the low country risk, they warn in the city that Argentina is at least 100 basis points higher than similar countries. “Interest rates are suitable to be able to carry out some operations at less than 9%. The problem seems to be in the collateral and the term, for a market that is very revolving around the recent problems of domestic debt. Fundamentals seem to be higher than valuations, except for one aspect, which is the level of reserves that have not been consolidated and which still do not show a clear accumulation policy,” fund manager MegaQM noted.
In December replacement in el Congress and progress on the government’s reform agenda They will also take the pulse of the market.