In the stock market they discount that after the agreement for the debt there will be improvements and a reduction in risk.
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Market analysts assured that in a post-debt swap scenario, the Merval index can rise up to 50% and the country risk may fall below 1,000 basis points.
The analysts assured that the price of Argentine assets in the local equity segment “are cheap” so they understand “there is room for them to rise.”
Regarding country risk, they observe that the trend for the months after a successful closing of the swap places it below 1,000 points, depending on the exit rate of the bonds that enter into the operation with external debt holders .
First, Mariela Díaz Romero, senior economist at econviewsHe pointed out that the Buenos Aires stock market “has already discounted a large part of the exchange benefits, although it has room to go up.”
“Investors are waiting for the announcement of more concrete measures. Now it is very cheap in historical terms. It could become a part of what was prior to the STEP at 500 or 600 dollars, “he postulated.
Last Friday, the Merval closed at 48,547.91 points, which represent around 383 dollars measured with the dollar counted with settlement at a value of $ 126.80.
As for the evolution of local risk, which is in the area of 2,100 basis points, for Díaz Romero it will depend on the policies that are announced aimed at being able to face the payments of the bonds in the near horizon.
Therefore, the economist explained that some investors consider it optimistic to discount at an exit rate of 10%, and prefer a range of 10% to 13%.
“In a very constructive scenario, the country risk could reach around 850 basis points, but with a fiscal commitment from the Government. In a more intermediate or stress scenario, I see it closer to 1,000 basis points, “he said.
In the same line, Santiago López Alfaro, partner at Delphos Investment, He indicated that he expects “bonds with parities up, with stocks that should begin to recover ground when the world economy finishes recovering, Brazil and then Argentina.”
López Alfaro, estimated that the Merval measured in CCL dollars “is expected to move to the 600 area” and specified that the country risk with an exit rate of 10%, “the country risk will be at 900 basis points.”
With a more cautious look, Daniela Wechselblatt, CEO de DW Global Investments, affirmed that Argentina’s structural problems remain, and “this situation is deepening with the current crisis generated by covid-19.”
“Any investor who understands this scenario knows that the underlying problem continues to exist and the Argentine economy continues to be unsustainable. The arrangement with the creditors, in this case, was only the first step ”, he indicated.
Wechselblatt said that the recovery of the shares in the reference exchanges was hand in hand with the technology companies and that in the Merval most of the companies belong to traditional industries.
The specialist placed the Buenos Aires stock market around 400 dollars for the next few months and clarified that “if it is arranged with the IMF, the scenario will be better.”
“Country risk is now going to be affected by the negotiations with the IMF, which are the next step. I think it can stay in a range that is now or at most a little higher, between 2100 and 2500 basis points, “he concluded.
To its turn, Mauro Mazza, Head of Research at Bull Market BrokersHe explained that, if any foreign event were excluded, “the Merval has to rise 50% in dollars to 600 points and the country risk would be between 950 and 975 basis points.”
However, he warned that the main threat facing the local equity segment is the next presidential election in the United States.
“If Trump is not reelected, he will probably be discounted much earlier and at the end of September and October it will impact the market. This can generate losses of between 25 and 30% in the Merval in dollars ”.
For Mazza, the humor of the Buenos Aires stock market will be linked to political events and the market is already watching the legislative elections of Argentina in 2021.
“The great movements of the Merval depend on who governs and for how long. To think about a structural change in trend we have to wait for the 2021 elections, “he concluded.
To its turn, Santiago Abdala, Director of Personal Investments Portfolio (PPI), estimated that the news of the agreement for the debt restructuring has already been incorporated into the prices of Argentine assets.
“Once the swap is effective, we will see volatility in short-term assets. However, what the market and investors are expecting are measures to support economic growth, while the progressive correction of imbalances in the economy is projected ”, he analyzed.
Regarding the local variable income segment, the Director of PPI postulated as an exclusive need that a process of propping up the economy be promoted and, in this way, “there will be a more solid Merval”.
With a more critical stance, Christian Buteler, Financial AnalystHe said that the market “is going to have some drop in country risk due to the new agreement,” but warned that none of the structural problems that the country has were solved.
“Argentina continues to have the debt problem. What was done was to extend the terms, but the debt continues and the fiscal deficit is maintained. So the market is going to ask from now on how it is going to be done to pay the debt and what will be the economic program, “he explained.
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