Merval has amassed a collapse of almost 50% in dollars per year and only one 0.7% growth in pesos (almost 50% against annual inflation). Violent exchange turbulence (the exchange rate rose by more than 102%), coupled with the deterioration of all macro variables, dealt a heavy blow to almost all domestic stocks, also caused by a storm in emerging markets, before the growth rate in the United States (and market), as well as the constant danger that the US-China trade war implied (now also adds the danger of a slowdown in the global economy).
“The big surprise this year was the collapse of all asset prices in emerging markets since early February, but especially those countries that were very vulnerable, such as Argentina and, to a lesser extent, Turkey, which accused the currency. pronounced in their currencies ", explained Gustavo Neffa, partner and research director for traders.
Without highlighting too much sector level and regardless of the fundamentals of companies, some stocks lost more than 115% in dollars and almost 65% in pesos.
The only exception was Petrobras Brazil, nominally increased more than 160% Achieving a jump in dollars of more than 110%, supported by the Bolsonaro effect.
This time neither course in pesosa big winner in the first two years of President Macri’s can handle a currency crisis (who took two BCRA presidents in just three months), and not even dollar bonds, they acted like shelter.
“The dream of the continuity of compression of spreads was forgotten, the country risk more than doubled, and the loss of more than 20% in dollar parities became a big headache for the investor”, supported Diego Martinez Burzaco, strategist at MB Inversiones. Only “Letes” in short-term dollars turned out to be assets of asylum, capital preservation in dollars and acceptable income for new (and difficult) circumstances of our country.
Debt markets closed for Argentina, which had to resort to the IMF, which indicates the degree of debt vulnerability in early 2020, when the IMF ran out of money.
“Bonds could not find an equilibrium price. We saw a country risk of almost 800 points, it seemed that recovery was starting, and we were able to overcome 600 points, but unfortunately, we again passed 800 points. ”Described by Christian Buteler, financial analyst.
In recent months, the market seems to have found “a certain balance,” but everything is “very weak, and the currency crisis cannot be considered complete,” Buteler warns. For Neffa, the money turnstile applied since October reassured the stock market, but does not solve the problems of the funds and underlines the depressed activity.
Best of 2018: Petrobras Brasil
Among the few works that ended in nominal terms in 2018, the Petrobras Brasil (+ 161% in pesos)Inspired by the victory of the right candidate Yair Bolsonaro, who provided the best business climate in the neighboring country, while the company managed to achieve better results.
Spaniards on the podium Repsolthat, although they continue to trade in the country after leaving YPF, they work with little liquidity in the general panel, thanks to which their place among the most advantageous is purely statistical. In third place is the mentioned: wholesale exchange ratewhose value doubled in a year, based on $ 18.67 at $ 37.70. Something similar happened with Euro: from $ 23.58 at the end of December 2017, rose 92.2% to $ 45.32.
In the top ten sovereign bonds in dollars (depositors in pesos)which moved higher by The effect of a jump in US currency in relation to the national currency (although it is worth noting that strictly in dollars all securities fell this year).
Worst of the year: PBI coupons
Among the major annual losses most important PBI Peso Coupons (-81.4%), which indicates the deterioration of expectations for growth in Argentina: we started the year with a forecast of GDP growth, but ended up with completely negative indicators that will continue in 2019. the growth of the country by more than 3.2% is the level required to pay for this instrument.
Next, we recorded several common panel actions, which dropped to more than 64%. For example, a shoe manufacturer Grimoldi This was affected by a drop in consumption in the middle and upper middle range of the population. Longvie the same thing happened: with the fall in purchasing power, very few decided to upgrade kitchens, including hot water tanks, and part of the demand was turned to cheaper brands.
In the same time, Endesa costanera (The largest electric power company engaged in thermal processes in Argentina) suffered as one of the least efficient companies in this sector, which investors noticed, said Rafael Di Giorgno, director of Proficio Investment.
AGROMETALThe machine maker was another of the worst hit this year. He began to increase his plant in debt, but the rate increase eventually led him to difficulties, given that almost all the equipment that the agricultural sector buys through credit, and now is almost frozen.
One of the companies highlighted in this negative rating, Cablevision (This is part of the lead group) is punished for not completing the merger with Telecom, a process that has not been resolved for too long and made many investors nervous.
Another index company, Merval, that is on the red list is the newcomer stock exchange. Superviel GroupHe reported a very large drop when he reported a huge loss due to a bad exchange rate. The market questioned its risk control systems. According to DiGiorno, changes occurred in the manual to eliminate the bad taste that this event left in the depths of the company.