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Home / argentina / Thanks to the Pichetto effect, S & P Merval had the best week of the year: it won almost 16% in dollars

Thanks to the Pichetto effect, S & P Merval had the best week of the year: it won almost 16% in dollars

The local stock market has made solid bullish growth, growth of 5% on Tuesday and 6.7% on Wednesday (plus 2.2% on Monday) approval of the market for the decision of Makri to bow to the moderate Peronist as a partner in the formula with the idea to change the election, which reduced his chances of winning. During the analysis of this important increase, the fact that the actions they came from severe punishment, even despite the May rally.

So, the index S & P Merval Argentine Stock Exchanges (BYMA) peaked at 40,972.04 points on Wednesday, then try a couple of minor fixes between Thursday and Friday (-0.7% and -0.4%, respectively), and thus end the week with 40,487.61 units.

Actions BYMA were the stars of the week on the local stock market, registering in just five days shot at 31% in hard currency. Cablevisión documents (+ 24%) were uploaded onto the podium; and Group Superviel (+ 23%).

“In addition to making a profit, the Pichetto effect extends to local assets, given that investors evaluate their inclusion in the (pro-government) formula as a favorable political signal regarding governance, even though uncertainty about the election continues to prevail” confirmed by Gustavo Ber, senior economist at consulting company Estudio Ber.

With this new panorama from Delphos Investment believe that “we are moving towards a dispute between Peronized Kirkherism and Peronized Macrism. The result of the election will depend on Peronism, implying that the distinction will be achieved through the explicit or implicit commitment of the Peronist governors and mayors to each of the formulas. Makri, after a terrible political moment between March and May 19, seems to have come to the surface and returned to the ring. ”

“Markets agreed that polarization is effective in defining the political landscape, and then showed strong positive growth,” analyzed mainly from Invecq Economic Consultant.

In any case, it is worth remembering that the agreement between the former Minister of Economy Roberto Lavagna and the governor of Salta, Juan Manuel Urtubuey, who will follow the same formula, is negative for Cambiem, since he can deduct some points in STEP.

Finally, the decision of the leader of the “Front Renovador” Segio Massa to conclude an agreement with Kirchner in the alliance, which will be called the “Front de Todos”, was already rather devalued by the market, so it did not affect the quotes too much.

In this context, since Delphos believe that “It can be expected that financial assets will return to work with implicit electoral probabilities at the beginning of the year, and this is still a political trade, where the premium that you can try to get as an investor is 100% political.” There are opportunities. for portfolios willing to take a high risk. "

at Sergio MoralesPresident of the Latin American Investment Center (CELAI), “The market overreacted to the new formula, so it is expected that from this point on the market will continue to recover with selective growth, while an external front is being accompanied.”

In this regard, throughout the week, economic data continued to surprise negatively (in China, industrial production growth in May increased by 5%, which implies a slowdown to a minimum of more than 17 years and lower than expected by the market), while commercial and political tensions continued to grow, creating greater risks for the global scenario.

Bonds and country risk

In fixed income main dollar bonds closed at a loss After a sharp increase in funds sent to the market in accordance with the cloud design, which gave rise to the formation of alliances in the presidential race in October.

Sovereign hard currency bonds fell by an average of 0.4% after they got the same percentage in the first part of the business and after achieving an improvement of 7.5% during eight consecutive sessions, in the middle of a certain selectivity for preferences between names, expressed in pesos or dollars.

Curves of dollar bonds were partially depleted, with the short portion squeezing 270, 240 and 200 pounds (20 s, 21 s and 22 s), while the long stretch squeezed around 50 pounds, and he managed to achieve better performance over the duration ( + 6.50% on average against the short part by + 5.0% approximately).

As for the peso segment, the short lekapov did not have big movements as to what they corrected with the long one between Tuesday and Thursday. Lecaps since expiration in 2020 squeezed more than 800 basis points.

On the other hand, inflation-linked bonds (CER) also reacted strongly to growth. A2M2 and TC20 cut 700 bp between Tuesday and Wednesday from the level of 40% of the real rate to almost 30%, although on Thursday and Friday they returned some of this growth, working at around 35%, according to the Consultatio.

Finally, Argentine Country Risk JP.Morgan prepared by the bank rose to six units, to 850 basis points, also a minimum area in almost two months, and also far from 1014 intraday points recorded on Monday of the previous week.

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