Argentine Assets Rise Amid Middle East Tensions, Limited Trading Volume
Local markets experienced low trading volume due to a non-working day, but Argentine assets were boosted by recent developments in the Middle East.
Argentine ADRs largely gained ground in New York trading on Monday, while the Buenos Aires stock exchange operated at a reduced capacity due to the holiday. Dollar-denominated bonds similarly followed this upward trend. The country risk, meanwhile, saw a slight decrease, remaining above 600 basis points.
“The market opens today, whereas without settlement due to bank closures, and tomorrow there will be no activity at all due to the local holiday,” explained analysts at Portfolio Personal Inversores (PPI). They added, but, that “as in recent weeks, the main driver will continue to be the international front.”
“The evolution of the conflict in the Middle East and its impact on the price of crude oil will set the tone for the week, in a scenario where any news could continue to generate volatility.”
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ADRs and Dollar-Denominated Bonds
“Signals of a possible de-escalation of the conflict in the Middle East are triggering a strong rise in Wall Street, simultaneously with a significant drop in oil prices below USD $100, which quickly favors a positive reaction in ADRs and dollar-denominated bonds,” argued economist Gustavo Ber.
Dollar-denominated securities posted majority gains on the Buenos Aires stock exchange, led by AL41 (+1.7%); GD46 (+1.6%) and AL35 (+1.3%). In the U.S., sovereign titles also advanced, with the AL41 (1.40%) and AE38 (1.31%) seeing the largest gains.
the country risk remained stable above 600 basis points, with a slight decrease from the previous session, around 608 points.
Argentine Stocks in Wall Street and S&P Merval
Argentine stocks, for their part, recorded widespread gains on Wall Street. “The main ADRs are registering a significant average improvement of 2%, with banking shares leading the rebound after the heavy punishment accumulated, while energy stocks are benefiting from the drop in oil prices,” commented Ber.
The main gains of the day are led by Grupo Supervielle, which jumps 9.25%. BBVA Argentina and Loma Negra followed, with gains of 6.9% and 7.1%, respectively.
Locally, the S&P Merval rose 1.9% to 2,778,025.03, while its dollar counterpart rose 2.3% to 1,900.34 points.
Local stocks are trading with widespread gains, led by Grupo Supervielle (+8.6%) and IRSA (+6.3%). Conversely, YPF fell 2.4% and led the declines.
