he Argentina is a country of risksIt was measured by investment bank JP Morgan through its EMBIGD index, and was quoted on that day Tuesday 2 December in 647 basis pointsThis indicates a slight downward trend or slight variation compared to the previous day.
This quote was mentioned in A In light of relatively calm financial marketsThe Buenos Aires Stock Exchange reduced its previous gains and dollar-denominated sovereign bonds recorded moderate increases, seeking to strengthen the streak of optimism that characterized the end of November. The stability of the indicator, which is the key to assessing the cost of external debt, occurs in a scenario where clear signals are expected regarding economic policy and the accumulation of reserves.
How much country risk is quoted today in Argentina?
The Argentina Country Risk Index, prepared by JP Morgan, has reached… 647 basis points At close of business on Tuesday, December 2nd. This value represents almost zero variance, with Slight downward trend From one Three points compared to 648 points at the previous day’s close.
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According to data collected by Rafa Pursatil and other specialized media, this figure is a fraction of Stable trading range At the beginning of December, reflecting Cautious but positive mood Which sustains the local market after November’s widespread gains in Argentine assets. The stability of the index is supported by the average movement of dollar sovereign bonds (Global and Bonaris) which, despite profit-taking in stocks, managed to advance approximately 0.4% on average.
Evolution of country risks in the past week
The development of country risks over the past week was characterized by a strengthening of the downward trend that emerged at the end of November. Just four days ago, Friday 28 NovemberThe indicator fell to 648 basis pointswith a reduction of three units, a movement that was confirmed Good financial climate Last week, Argentine assets, including stocks and bonds, recorded strong increases.
This weekly decline occurred within a context in which the market appears to have placed it Stop the initial post-election euphoriaTo enter a phase of greater caution while awaiting economic tariffs. The behavior of the EMBIGD index is directly related to the price of debt securities, which managed to maintain a minimum value, which translates into a narrower risk premium compared to previous months.
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Despite pausing or minor profit-taking in other market sectors, such as the fall of the Buenos Aires Stock Exchange after five consecutive rounds of increases, country risks remained Fixed in the range of 646 to 648 points. This relative stability suggests that although doubts remain about the ability to accumulate reserves and the need for a comprehensive economic plan, the perceived risk of… shortening Sovereignty did not increase significantly in the short term.
What are country risks?
Country risk is a Basic financial indicator Which measures the probability of a country’s existence Defaulting on your foreign debts (Located in shortening). It is prepared by the American investment bank JP Morgan through the index Embed (Global Diversified Emerging Market Bond Index). Its value is expressed in Key points (One basis point is equivalent to 0.01%) and acts as a risk premium, i.e. the additional profitability required by investors to purchase debt securities from a developing country compared to risk-free assets.
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To calculate it, JPMorgan compares the yield of a country’s sovereign debt securities (for example, 10-year bonds) with the profitability offered by sovereign bonds. US Treasury bonds At the same time. These US bonds are considered the safest investment in the world, so their yield serves as a reference or “floor”. The difference between Argentine bond yields and US bond yields is country risk.
In practice, a country risk of 647 basis points means that the market is asking Argentina for a yield (interest rate) of approx An additional 6.47 percentage points Higher than the price of US Treasuries to lend you money. A low value (close to zero) indicates high confidence and low cost of financing, while a high value, such as that observed in times of debt crisis in Argentina, indicates high mistrust and expensive or inaccessible access to international credit markets.