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Why is today a good day to take refuge in the dollar?


The markets invite us to retreat into winter quarters. sovereign bonds hard dollar They show tired behavior, and no longer achieve new highs. The gap between dollars is very loweverything is an invitation to take Dollars in your pocket and spend the New Year’s Eve Parties liquid.

He MEP dollar ends at $954 when the exporter dollar It is located at $832, a gap of 15% separates it, it is a difference dreamed of months ago, and that today becomes a reality. The Government has a long way to go to lift the restrictions, nothing will happen immediately. The presentation of the DNU was impeccable, its application will depend on political management, the weakest point of the Government. The longer the launch is delayed, the more doubts the markets will have, which are ready for profit taking.

Sovereign bonds before the first round of the presidential elections were trading around $28today they are trading around $40a profit of 43% in a short period of time, between the profit realized, and a scenario full of difficulties ahead, taking profits does not seem like a bad option.

The problem is where to allocate the money, there negotiable obligations seem an excellent option, they have little volatility, and pay rates between 8.5% and 9% annually, on the head of a human person they do not pay profits, and they do pay personal assets . There are options for all tastes, but the negotiable obligation alternative seems to generate the least stress.

What is the star stock of the local market?

Before the presidential elections, Merval was trading at 800,000 and today it is trading at 948,000. This resulted in an increase of 18.5%, not bad for being invested in stocks where volatility is very high, and depending on the chosen paper there were superior returns, for example, YPF was worth $13,000 before the presidential elections and closed at $16,850, with a gain of 29.6%. These returns invite profit-taking and investing in something safe like negotiable bonds.

These final numbers show that bonds had more to go up than stocks in the market. Taking this data into account, any decline in the bond market will be a buying opportunity, we will see in the stocks.

What to expect for importers?

For those who are in the import business, the import dollar which is the wholesale dollar plus 17.5% gives us a value of $945, while the CCL dollar $942.7this is an invitation for importers to buy dollars, regardless of whether they are prevented from accessing the market in the next 90 days. Single Free Exchange Market.

Businesses have to be closed and having the dollar bill is a peace of mind to spend Christmas, New Year’s Eve and Epiphany. On the other hand, the libertarian government should free Argentina’s trade with the world and allow economic agents to pay with the dollars that people were able to obtain.

How will Bopreal bonuses work?

Parallel to this comment, the Government released the bonds that it wants to issue to importers. These bonuses are horrible, even the name is ugly, they are called Boprealand comes in three versions.

The first expires on October 31, 2027, at a rate of 5.0% annually. The second version expires on June 30, 2025 and the interest rate is 0%. The third version expires on May 31, 2026 and pays a rate of 3.0% annually.

In all cases they are subscribed at par, in pesos at A3500 exchange rate, Amortization and interest are charged in dollar bills. The government seeks to place these bonds to absorb market pesos and reduce the stock of leliq, which is around $28 billion. If it places US$20,000 million, it would absorb $16 billion and it would be a true miracle for this to happen, when in the market there is a bond with a higher yield like the AL30whose return rate is 34.2% over a period of 6 years.

Conclusions:

  • The reserves are located at US$22,570 million and that is very good news. This is a good starting point. The Government will seek US$5 billion from grain exporters, US$10 billion from the IMF and probably US$3 billion from international financial organizations. If any of this is achieved, the markets will decompress and calm the rise of alternative dollars.
  • A successful placement of Bopreal would reduce monetary liabilities, and this would allow an appreciation of the peso, it would be a true miracle for this to happen, but let’s not rule it out, with Javier Milei everything is possible.
  • Before the presidential elections the gap was greater than 100%, today the gap between the MEP dollar and the exporting dollar is 15%, and there is no gap between the importing dollar and the CCL dollar. Clearly the dollar is at a bargain price in this scenario. If the DNU that the President sent to Congress does not prosper, the alternative dollars could arbitrate with the card dollar which is located at $1,320, there is a distance of 38% to capture value.
  • Switching to dollars and going to winter quarters, which are actually summer quarters, is not a bad option, if we have just closed a significant profit, and the economic and financial scenario does not seem consolidated. The dollars that would come from Qatar are not on the horizon, there is no rush on the part of the IMF to finance Argentina, and we do not see people lining up to buy Bopreal. On the other hand, the DNU is great, but it seems that there is discomfort with parliament and justice. It wouldn’t hurt us to unsaddle until it clears up, no one went out of business to make a profit.





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