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Spicy dollar (does it beat inflation?) and the star bond to invest


. – Of course, he bonus AL30 It is worth $41,400 on the stock market at a parity of US$37.60. Between now and October 2027, it pays amortizations of US$52.0, and interest of approximately US$2.0.

The AL30 suits me better than the Bopreal.

. – Correct, the question would be, why is the AL30 worth so little, and the answer would be that there is a high probability of a debt restructuring, which will not be compulsive (we hope) but at least voluntary. Argentina in the current context does not have dollars to pay such a large amount of debt.

What does someone who buys AL30 have to do?

. – Try to buy and sell it as many times as you can, because until the future Argentine dollar fund flow scenario is defined, these securities continue to be quoted at extremely low values, which discount a probable debt restructuring in the future.

You are dropping a bomb

. – I don’t think so, the price of the AL30 speaks for itself. On the other hand, let us remember that we have lost the YPF trial in American courts, and if the ruling is upheld, US$16 billion will have to be paid, which implies that in the future the government will issue bonds to honor said ruling, this implies more supply of bonds, which makes us think that the price will not be the best.

Sovereign bonds for trading only

. – Correct, but I would not worry if I am well bought, a debt restructuring, well carried out, with a State that shows a fiscal surplus, could boost the nominal value of the bonds in a scenario of greater credibility.

What is an important date for bonds?

. – On July 9, 2024, the AL30 bond begins to pay amortization, a payment of US$ 4.0, while on January 9, 2025, the AL30 bond pays an amortization of US$ 8 and the bond AL29 pays an amortization of US$ 10.0. From those dates on, every 6 months they pay amortizations of the same amount.

Will paying the debt become difficult?

. – Of course yes, that is why it is vital that the government makes as many structural reforms as possible this year, and that Congress supports these reforms. The year 2025 is loaded with debt maturities, and I won’t even tell you about the year 2026.

How is the congress scenario going?

. – We are not specialists in politics, but it would come out in general, and it would be very complicated in particular. This is a problem for the country, which will be felt in the market, bonds and stocks would fall, and the dollar bill would rise.

How are the 2024 inflation projections?

. – The Central Bank of the Argentine Republic (BCRA) announced the results of the Monetary Expectations Survey (REM) carried out by the most important consulting firms in the market. With the data there is a lot of fabric to cut.

Comment me?

. – The average consulting firm believes that inflation in 2024 would be 213.0% annually, while the devaluation would be 110.3% annually, with a wholesale exchange rate that would be $1,700.

Would the exchange rate be delayed?

. – It is a farce to say whether the exchange rate is ahead or behind due to the nominal evolution. We have to look at the real multilateral exchange rate that measures the competitiveness of our currency with other currencies in the world, and so far it works very well for us. We would also have to analyze the real exchange rate, because if I lower taxes or deregulate the market I can gain competitiveness and improve the exchange rate.

The average of the citizens follows nominal variables

. – It’s correct, but they are not the best

Do you think they should devalue more?

. – I’m taking a different path, I think they should lower more taxes. For example, if they increase export duties, they are lowering the real exchange rate, and that is a big problem. On Friday, grain prices fell, and that complicates the results for producers. If they are not profitable, they will sell in dribs and drabs, and that can also complicate the government. If the government wants dollars, it should lower withholdings, but I’ll leave that for tomorrow’s report.

As Do you see the markets with this projection?

. – Very simple, it is no longer such a business to have a bond tied to the evolution of the linked dollar, instead it seems appropriate to have bonds tied to the evolution of inflation, or a fixed term adjusted for inflation.

How do you see alternative dollars?

. – I think they will be on the rise, as a result of reserves that will be at very low levels. In February, the quota for purchasing dollars from importers will be expanded, and this will reduce the effectiveness of the BCRA. On the other hand, I do not think they can sustain over time liquidating exports 80% at the wholesale exchange rate and 20% in the CCL dollar. It seems to me that this will be rejected and the export will settle 100% in the free exchange market, at the wholesale dollar, otherwise it will not be able to meet the reserve accumulation goal that I signed with the IMF.

What other difficulty do you see?

. – The BCRA’s monetary liabilities total $29.5 billion, and grow at a rate of 100% annually, this is an endogenous emission that the system has. It is true that the government does not want to issue pesos, but I inherited this liability and it is difficult to genuinely pay these interests.

So?

. – We continue with monetary liabilities that are growing very quickly, as of January 10, total monetary liabilities amounted to $39.8 billion, against gross reserves of US$23,411 million. This continues to give a very high equilibrium dollar against a MEP dollar that stands at $1,096, with a bargain price.

Conclusion

. – Be careful with public debt, it will grow too much, this implies more supply for a very low demand, this implies falling prices. On the other hand, if structural reforms are not carried out, the payment of this debt in the future is in danger, with which a probable voluntary restructuring would be increasingly closer.

. – Inflation according to the BCRA’s REM would be almost doubling the devaluation rate, inflation at 213% annually by 2024 and devaluation rate of 110.3% annually. This implies that bonds that adjust for inflation will run faster than bonds that adjust for the wholesale dollar. Regarding bonds in pesos, the government is preparing a voluntary debt exchange with banks, to reconfigure future maturities in pesos. Putting together a portfolio and sleeping peacefully is very difficult.

. – The dollar bill, if everything goes well, would be the asset that should rise the least this year, however, the one who was burned by fire sees a cow and cries. On Friday the blue dollar surpassed the price of the MEP dollar, and it seems that it is going to dispute the position of the CCL dollar, and everyone is running to reach the tourist dollar which is located at $ 1,336.8.

. – In the private reports we will leave you the projections of the TOP 10 of the best forecasts of the Argentine consulting firms, and our own projections that include inflation, wholesale dollar and CCL dollar. Premium reports will include monthly details and an 18-month projection. These projections are reviewed every 30 days, and are only a reference for the decision-making process in the company or for the investor.





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