/cloudfront-us-east-1.images.arcpublishing.com/infobae/NGQDSVZOG4XDP2A3KWEQ32E5YQ.jpg?fit=%2C&ssl=1 "The dollar woke up and bonds remain unstable amid crossfire between government and creditors")
As confusion over debt negotiations mounting, the dollar rose on the first day of July. The obligations to pay salaries and bonuses were left behind, therefore the supply of foreign currency decreased and the demand for alternative dollars increased, recovering almost 5% of their value, half of what they lost in June.
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The rise in the dollar pulled the shares, one of the assets chosen to do cash settlement operations where they are triangulated with pesos and currencies. The cash with liquidation registered an increase of $ 3.96 (+ 3.8%) to $ 108.10. The stock market dollar was the most demanded and increased $ 4.97 (+ 4.9%) to $ 105.50.
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Of course, the opening of the month renewed the purchase quota of USD 200 per month for those who have bank accounts. The demand for these dollars increased the “puré” operations and reactivated the free market where the currency rose $ 2 to $ 128.
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The “mash” consists of selling the dollar that was bought in the banks at $ 74.12 – five cents above the previous wheel – to which the solidarity tax is added and makes up a $ 95.55 dollar, which is then sold in the free market with a profit of around $ 28 per dollar, considering that the storekeeper is paid at $ 123. The value of $ 128 is the sale value of the operators.
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In the wholesale market, with operations for USD 367 million, the dollar rose 6 cents to $ 70.52. The Central continues with its devaluation rate of 6 cents a day for three consecutive wheels and 18 cents on the fourth wheel, a way to average a 0.10% devaluation daily. This time the balance was negative because the exporters liquidated a small amount of dollars and the purchase of importers was authorized. On the balance sheet, USD 20 million of reserves were lost, remaining at USD 43,223 million.
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The Stock Exchange reacted, after three consecutive bumps, in the hands of the cash operations with liquidation and the S&P Merval, the indicator of the leading shares that the day before lost just over 4%, recovered 3% but with operations for $ 513 million, half of business from the previous wheel, which speaks of the weakness of the movement.
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Pampa Energy (+ 5.89%) led the increases followed by Supervielle bench (+ 5.74%) and Transportadora Gas del Sur (+5,52%).
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Argentine ADRs – certificates of ownership of shares listed on Wall Street – had a favorable wheel with a predominance of increases. America Corporation stood out sharply with a 11.11% rise, followed by Supervielle bench with 5.48% and Take off with 5.01%. The news that flights abroad will resume favored the application specialized in travel and tourism.
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In the bond market the situation is volatile because the crossfire continues between the Government and the creditors who, although they signed confidentiality contracts, do let the letters know that they are supposed to play through the media. It is the closest thing to a trick or poker game where lying or bluff serving.
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Of course, what both parties say is not credible. Argentina threatened to settle part of the creditors and go to trial with those who do not enter the swap. One of the largest creditor groups responded that they will go to trial. They also resort to all kinds of attempts to approach a bond that is worth close to $ 55. The idea is to achieve the best possible price because they do not intend to keep it in their portfolios but to start selling them immediately after the negotiation is over. Few believe in Argentina’s ability to pay.
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In the middle appeared S&P Global Ratings, the risk rating agency that lowered to “D” the note of seven bonds under New York law after the payment term of the Global bonds for USD 512 million expired. “D” is the lowest rating that contrasts with the highest that is “AAA”.
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For all this, the bonds with Argentine legislation, which are tied to the result of the negotiation of the titles under foreign law, did not have a good wheel. He Bonus 2020D, which is the one that enters the negotiation lost 0.61%, while the Bonar 2024, yielded 0.53%. Long bonds that were born in 2005 with the debt swap in the management of Nestor Kirchner, they had no better luck and the Discount lost 0.75% and the Pair 2.23%. The result was an increase in the country risk of 19 units (+ 0.8%), which led it once again to pierce the ceiling of 2,500, reaching 2,513 basis points.
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Today, the recovery in alternative dollars is expected to continue and pull stocks. Bonds will be adrift in the trading nebula. The key information is what degree of acceptance the Argentine offer will have. If those who agree with the proposal add a bond holding of less than 50%, the negotiation will be a failure that would be equivalent to a quasi-generalized default.
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