Argentine bonds deepen losses and country risk climbs to highs due to investor mistrust

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Argentine bonds deepen losses and country risk climbs to highs due to investor mistrust




The president of Argentina, Alberto Fernández, attends a press conference in Mexico City


© Reuters / HENRY ROMERO
The president of Argentina, Alberto Fernández, attends a press conference in Mexico City


By Jorge Otaola

BUENOS AIRES, Feb 23 (Reuters) – Argentina’s assets closed down again on Tuesday due to mistrust among institutional investors about the country’s economy, which was pushing country risk into the zone of a new all-time high.

The complications generated by the coronavirus, high inflation and the slow negotiations with the International Monetary Fund (IMF) for an extended facilities plan are three difficulties that keep those who participate in the local market on the alert, operators said.

Argentine President Alberto Fernández said Tuesday that he wants to reach an agreement with the IMF that suits his country but will be “very careful” in the negotiations.

“We are working to reach an agreement (with the IMF),” Fernández said during a tour of Mexico. “We’re trying to find a loan deal that … was embarrassing.”

* The country risk prepared by the JP.Morgan bank climbed 18 units, to 1,519 basis points around 17:00 local time (2000 GMT), after scoring an intraday maximum of 1,520 compared to 1,504 the day before and a start at 1,083 points on September 10, when the index was modified due to a debt swap carried out by Argentina.

* OTC bonds averaged a 0.6% drop, with the benchmark ‘Bonar 30’ posting a 1.1% loss. This market accumulates losses of 2.6% in five consecutive sessions.

* The Fernández administration is in talks with the multilateral body to reach a new program to replace the agreement signed in 2018 by former President Mauricio Macri, which had a loan of 57,000 million dollars, of which 44,000 million dollars were disbursed. Dollars.

* A group of creditors last week criticized the South American country for what they described as “erratic” economic policies that are affecting growth and hitting bond prices, five months after the government restructured some $ 65 billion in debt external.

* The S&P Merval Buenos Aires stock index fell 2.87%, at the provisional close of 47,856.68 units, after falling 5.95% in the previous three wheels. Intraday, the stock market lost 3.83%, to return to levels of last November.

* The Ministry of Energy issued a resolution eliminating the subsidies that some 2,900 industries received, from automotive to large commercial spaces and oil, for the cost of electricity, the ministry said in a statement on Tuesday.

* The wholesale peso fell 0.11%, to 89.53 / 89.54 per dollar, with the intervention of the central bank (BCRA) to regulate the prevailing liquidity, which allowed it to add around 560 million dollars in February to the battered international reserves.

* In the alternative segments, the peso closed at 143.1 units in the ‘Cash with Liquidation’ stock market (CCL), at 139.5 in the ‘MEP dollar’ of the Electronic Open Market (MAE) and at 146 units in the informal band .

* The exchange rate gap closed in the area of ​​63% between the official and marginal markets, the lowest since July 2020.

(Reporting by Jorge Otaola; Additional reporting by Hernán Nessi; Edited by Eliana Raszewski)

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