Markets: with minimal rise, the Stock Market remains in a record zone

Argentine stocks have been a winning bet in recent months.
Argentine stocks have been a winning bet in recent months.

The Argentine stock market registers slight gains this Thursday, to chain a bullish series of seven consecutive trading rounds. The local stock market has just scored several records in pesos, hand in hand with a notorious retraction of country risk and liquidity support after a recent credit improvement.

The leading S&P Merval index of the Buenos Aires Stock Exchange rose 0.5% to 225,800 points at 12:30 p.m., after marking its new intraday all-time high of 228,321 units a moment after trading began.

Financial papers continue as stars in the bullish rally, at the rate of Argentine ADRs on Wall Street. So far in January, Banco Supervielle rises 27% in dollars; Galicia Financial Group, 24%; Banco Francés, 19%, and Banco Macro, 15 percent.

In this way, the Buenos Aires Stock Exchange drags an increase of around 170% in pesos during the last twelve months, which generates a return converted into dollars close to 60%, according to the parity of the “cash with settlement” implicit in the ADRs, a gain that captures the interest of institutional investors from different latitudes.

“Argentine ADRs are unstoppable and in the few rounds of the year there are several assets that exceed 20% in dollars. Among these cases, the banks mark this trend, Edenor joins and Pampa does a little further behind with almost 15% in just seven wheels of the foreign market. The rest does so with an attractive 7% in the currency among the most common returns,” he added. Javier Ravadirector of Rava Bursátil.

The Merval in dollars accumulates “a gain of 15% so far this year. In this way, the ‘Mervaleta’ marks a new post-PASO 2019 record and exceeds 100% growth for the first time since the 2022 lows observed in July”, the analysts from Portfolio Personal Inversiones acknowledged.

The market awaits the inflation data from INDEC corresponding to December, and that of all of 2022, which could be around the area of ​​5.2% and 95.5%, respectively, one of the highest levels in the world.

Dollar bonds earn 0.9% on average, according to the evolution of Global titles with foreign law on Wall Street. JP Morgan’s country risk rises four integers for Argentina, to 2,010 basis points.

“Dollar bonds did well, rebounding from very low levels, and would continue this upward trend. We do not see a decoupling this year between sovereign bonds in dollars and bonds in pesos; it seems that they are going to live again in the ‘same galaxy’ and have very similar returns, unlike the other year”, explained Adcap Grupo Financiero.

For the Research for Traders experts, dollar bonds extend the rebound “in an international context of lower global risk aversion given expectations of lower inflation in the US in December, and given a rate of return on Treasury bonds of the US at ten years that remains at the level of 3.5%” per annum.

“Investors also continue to take advantage of the low parities of Argentine securities in dollars and still see attractive returns in a year of presidential elections where a change of government is discounted,” they added.

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