Nicolas BorraMarket analyst, analyzed on Canal E the local financial impulse following the placement of the new government bond and the signals that the market expects a consolidation of predictability.
Argentina’s return to international debt markets was seen as a positive signal, albeit with nuances. That’s how he explained it Deletewho claimed: “The constant return to international markets must be seen as good news“, although he made it clear that the placement did not achieve the expected enthusiasm.
The government wanted to raise $1 billion, a goal that was met, although with lower demand than expected. “The offers amounted to 1,400 million; It was expected to be at least double“, he explained Delete. Nevertheless, he emphasized: “As a first step, I think it’s definitely positive“.
From a market perspective, the new bond also opens the door to a restructuring of the debt profile. “A good alternative would be to swap old debt from the AL and GD curves for new, better-designed debt“, he explained, emphasizing that “it is always more positive to see a bond close to parity of 100 and not 70 as is the case with old bonds.”
Country risk, reserves and key signals
One of the indicators the market is following closely is country risk, which remains high. “It is above what we would like to be similar to neighboring countries” he admitted Deletealthough he emphasized that “The market is optimistic and believes we are on a downtrend“. In this sense, he clarified the following:”A normal country risk for the region would be 400 points“, which would mean a greater appreciation of the bonds.
Attention is also on creating reserves and negotiating a possible repo with international banks. For Deletethere is the critical point: “The market waits for signals in the accumulation of reserves and does not always play a role“. Although he acknowledged that “Countries generally rely more on RPGs than cash“, warned that”It would be good to give a signal to bondholders to start buying reserves“.
Furthermore, he warned about the financial costs of these tools: “We need to see at what pace we acquire these repos and whether or not they affect debt sustainability in the long run.“.
Business, politics and exchange rates
As far as corporate financing is concerned, Delete greater activity expected. “We will see a lot of internships by 2030” he noted, driven by the incentive system for large investments. The key sectors will be “Energy, which will require a lot of capital, and also mining“, although he clarified that “This requires political and macroeconomic stability“.
On the political front, he emphasized the importance of budget and labor reform. “Budget is the key to foresight; You cannot manage an entire mandate without a budget” he explained, adding: “The market also wants a consensus on modernizing the world of work“.
Finally, referring to the dollar, he explained: “December is usually quiet“, but warned that “a recovery could occur in February due to travel-related demand.”
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