Business Markets operate with positive trend, after extension of the...

Markets operate with positive trend, after extension of the term for debt restructuring

In turn, the S&P Merval index of the Buenos Aires Stock Exchange advanced 0.3% to 41,540.9 units, in a selective and reduced business context. While in fixed income, the securities operate with a majority of increases.

It happens after the Ministry of Economy officialized this Friday the extension until June 2 of the term to renegotiate the US $ 66.3 billion of debt securities issued under foreign legislation, with the aim of continuing the dialogue with creditors in search for an agreement.

This was done through Resolution 243/2020 published today in the Official Gazette, which also extended the date of announcement of the results of the Invitation to exchange for June 3.

The postponement of the negotiations will not prevent the country from going into default this Friday if it does not pay off debt interests of around 500 million dollars.

“The current debt that will default, is unpayable. If there is a successful swap and the debt is restructured, the new debt will also become unpayable sooner rather than later,” estimated the consultancy Economy & Regions.

Argentina and its creditors seek to reach an agreement, but there are still differences between the government’s initial offer and the counter-offers.

“The negotiations continue on a path that we consider positive. My vision is that we are experiencing a greater mutual understanding between the two parties,” Economy Minister Martín Guzmán told Reuters.

Previous closing

With the highest expectation for the signals about the next steps in the restructuring of the sovereign debt promoted by the Government, the Argentine shares operated with a majority of increases on Wall Street, achieving in some cases advances close to double digits.

The roles of Argentine companies ended with most increases led by Pampa Energía (+ 9.2%); Banco Macro (+ 7.5%); Galicia Financial Group (+ 7.1%); Corporación América (+ 6.8%); and Transportadora Gas del Sur (+ 6.6%). The few losses of the day, meanwhile, were noted by Irsa (-7.7%); Tenaris (-3.4%); Ternium (-3%); Free Market (-1.6%); and Cresud (-1.4%).

Before the Government announced an extension of the negotiation deadlines (something that was confirmed this Thursday after the market closed), and while analyzing the counter-offers presented by creditors, at the local level the S&P Merval index of Stock Exchanges and Markets Argentinos (BYMA) improved 4% to 41,388.50 points, contrary to the negative trend manifested on the New York Stock Exchange.

Thus, in the leading panel Pampa Energía gained 7.8%; Grupo Financiero Galicia climbed 5.9%; Banco Macro, 5.6%; Transportadora de Gas del Sur, + 4.1%; and Cablevisión Holding did it 3.9% (after presenting a good balance).

Conversely, BYMA fell 1.2%; Holcim yielded 1.1%; Cresud fell 0.2%; and Transener fell 0.2%.

Although positions have approached in recent days to restructure $ 65 billion, there are still differences between the initial offer of the Government and the counter-offers to close a deal before this Friday.

“Negotiations should not last many months because incentives to litigate are increased,” warned the ACM consultancy -Analysis of Macroeconomic Situation-.

They added that “in addition, the uncertainty about the final outcome of the negotiations would not help the recovery of post-pandemic activity, especially due to the ability of the private sector to obtain financing under better conditions than the current ones by promoting private investment.”

Bonds and country risk

In the fixed income segment, the main sovereign dollar securities operated unevenly, with increases led by DICA (1.4%), and losses led by AY24 (-1.1%).

Meanwhile, the titles in pesos were mostly takers, to close the day with increases of up to 1.5%, both for the CER section and for the floaters.

“Dollar bonds have recovered a lot in the last 10 days. Some have risen 20% -30%. If we get to have a successful restructuring scenario, this trend will continue, especially in shorter bonds,” said Santiago Abdala, analyst. of Personal Portfolio Investments.

Finally, the Argentine country risk, prepared by the US bank JP Morgan, remained almost stable as it rose just two points to close at 2,784 units.

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