Stocks in Argentina are seeing an increase in both New York and Buenos Aires prior to the upcoming election in Buenos Aires
In the bustling energy sector of Argentina, YPF, Transportadora de Gas del Sur, and Edenor are making waves in New York, with significant gains being reported. However, the course of the next few months remains uncertain, hinging on the government's ability to maintain currency control, the outcome at the polls, and the relationship with the International Monetary Fund (IMF).
The electoral scenario is adding pressure to the markets, with legislative elections in the province of Buenos Aires this weekend and national elections at the end of October. This uncertainty, combined with currency volatility, has led many investors to strengthen their dollar coverage.
The S&P Merval index is advancing strongly, gaining around 2.8% in pesos and 2.2% measured in dollars, reaching 1,988,662.77 points and 1,440.45 units, respectively. Argentine bank ADRs are also showing positive movement in New York, with Supervielle, Galicia, Macro, BBVA, YPF, and others rising.
Grupo Supervielle, Edenor, and Grupo Galicia are among the leading stocks with the most pronounced gains on the local exchange. Banco BBVA, Banco Macro, and YPF also show notable advances on the local exchange. Central Puerto, Cresud, and Transportadora de Gas del Sur also have significant gains on the local exchange.
Meanwhile, the interbank currency remains around $1.363 per dollar, after reaching a historic low of $1.400 at the beginning of the week. The Global 2041 and the 2029 bonds are falling, with decreases of 1.5% and 0.4%, respectively. The country risk, as measured by JP Morgan, closed this Wednesday with a slight drop of 5 units to 893 basic points.
Financial tension has driven interest rates to levels between 40% and 150% annually, compared to projected inflation of just below 30% for 2025. Global bonds are recording a majority of gains, with increases of up to 0.6%, such as the Global 2030.
However, the Treasury's intervention in the Uniform and Free Currency Market (MULC) this week, with the backing of the IMF, buying and selling currencies to regulate liquidity, has not gone uncontested. The Encuentro Foundation criticized the Treasury for assuming functions of the Central Bank, warning that this "aggravates the desinstitutionalization and exposes the fragility of the current scheme".
In the tech sector, Mercado Libre, Tenaris, Pampa Energía, Central Puerto, Cresud, and IRSA are showing positive performances in New York. Despite the volatile market conditions, it seems that Argentine companies are holding their ground, offering a glimmer of stability in uncertain times.
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