The positive streak that Argentine sovereign bonds had shown, given the prospect of a rapprochement of positions between the Government and creditors to restructure the debt, seems to have entered an impasse. In the last week, in the face of the imminent default in which Argentina entered today, that optimism was mutating towards greater caution. And fixed income securities reflected this.
After showing small variations in the last days, in which a low volume of operations stood out, the sovereign bonds in dollars issued under foreign law began the wheel this Friday with a majority of reds. However, over the course of the day, they reversed that initial trend and grew to 1%, which is the first response by the market to the partial agreement between the country and the bondholders to extend the term of negotiations until June 2.
Shy advances in New York law dollar bonds. Source: Bloomberg
Among the dollar securities issued under local law, meanwhile, the improvements were greater. They grew up to 2.65% led by Bonar 2037 (AA37D).
“The negotiations continue on a path that we consider positive. My vision is that we are experiencing a greater mutual understanding between the two parties,” Economy Minister Martín Guzmán told ..
The program would allow the Argentine Central Bank to increase its reserves and strengthen the tools to maintain the stability of the exchange market. However, as El Cronista learned, the line would not be used.
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“In a context of full uncertainty and with the grace period for paying the interest on global bonds already being completed, the market has already discounted the extension of the terms in prices of debt negotiations “, analyzed Investments Personal Portfolio (PPI), in a report. And I add: “Although the deadlines were not ideal, a path to reach an agreement is being fulfilled, with the typical sparks of a tense negotiation, but with both sides getting closer to meeting at a midpoint“
In this scenario, the country risk was practically unchanged. The index measured by JP Morgan added 1 unit to reach 2,789 basis points.
The country risk remains below 2800 points. Source: Rava.
Equities also exhibited a change in trend. Contrary to Wall Street, whose indices fell by up to 0.5%, the shares of Argentine companies showed most improvements in both Buenos Aires and New York.
Local adrs rose 1.4% on average. The growths were led by the IRSA papers, which were climbing 7.7%. He was escorted by the actions of Corporación Amércia, with an improvement of 4.7%.
Most improvements between ADRs. Source: Rava.
This same scenario was replicated in Buenos Aires. The Buenos Aires Stock Exchange fell this Friday after the government announced an extension of the term to negotiate the debt restructuring. But over the course of the day the S&P Merval index began to gain ground and was practically neutral, around the 41,413 units in a selective and reduced business context. In the previous session, the benchmark had noted an advance of 3.97%.