The rise of the free dollar marked the month that has just ended, but for many investors the real “celebration” left by April were the returns obtained in the various Argentine stocks, which came to gain up to 40% in pesos in just 28 days. A return that exceeded the rest of the market instruments.
In fact, the merval index which brings together the leading companies listed on the Buenos Aires Stock Exchange climbed 21% throughout the month, and in the accumulated of the year it already adds 47%.
In short, the advance of Argentine shares of up to 40% in the month far exceeds the 7% inflation estimated for April, the 10% advance of the MEP dollar and the 19% increase in the blue in the same period.
The biggest increases were led by Transportadora de Gas del Norte (TGN), which rose 40.2% throughout the month, followed by Ternium Argentina (39%), Out (37%) y Transenewhich increased 23.7%.
Meanwhile, Argentine shares listed and Wall Street with the ADR format had increases in their prices that reached the 12% monthly in dollars, as was the case with Central Puerto. They followed Transportadora de Gas del Sur (TGS) with 10.6%, and BBVA with 9.2% in US currency.
“Although the news went through the rise in informal dollars, MEP and cash with liquidation, there were financial assets that exceeded these increases. Clearly, the market is anticipating a change of scenery from the next elections, and in equities it is acting as a hedge against the depreciation of the peso”, iProfessional resume Juan Diedrichs, Capital Markets analyst.
For his part, Marcelo Prettya market analyst, agrees: “April, in general terms, has been a very good month. The shares recovered compared to March, where we remember that there were 2 episodes of abrupt falls due to the repercussions of Silicon Valley Bank (SVB) and then Credit Suisse and Deutsche Bank”.
The shares of Transportadora de Gas del Norte (TGN) climbed 40% in April alone.
April, a winning month for stock investors
As mentioned, the most winning stock in April was Transportadora de Gas del Norte (TGN), whose price rose 40.2% in the period.
“It was the month of the Agro dollar and the impact was mainly on the General Panel. Decree 194/2023 triggered prices with increases of between 40% and 75% in companies such as San Miguel, Juan Semino Mills, Río de la Plata Mills, Agro and Morixe Mills. Especially because for 90 days these companies will be able to export with a significant differential compared to the official exchange rate, especially in lemons, flours, oils. Although there are limitations, which are price controls and the bargaining power depends on that,” he told iProfessional Mauro Mazzaportfolio manager de Bull Market.
And complet: “The other issue of the month was the dollar shock, which caught the market off guard carrying the high rate carry trade and blew up this strategy. April was a month where cash won over any other dollar instrument.”
Regarding fixed income, there were strong falls, especially with dollar bonds with New York lawwhere the one that expires at 2030 (AL30) fell about 21%followed by falls close to 15% both in 2029 (AL29D) as in 2035 (AL35D).
“Bonds in both pesos and dollars did not perform very well. bonds in pesos slightly above inflationand the bond market in US currency is greatly interfered with by government interventions to try to prevent financial dollars from escaping,” summarizes Bastante.
Among the main indices in the United States, in a moderate context, the Dow Jones stood out with a rise of 2.5% throughout April.
The rise of the leading Argentine shares of Merval reached 40% in April.
What about investments in May?
Regarding what is coming to the market, the analysts consulted by iProfesional call for the “caution” of investors.
To see how everything continues, the answer will be the inflation data that we expect to be above 8%. With that information, the situation may become unstable again, especially with Sergio Massa”, sentence Mazza.
In this sense, he completes his idea: “The rate rise in pesos is a sign of weakness rather than strength, reminding us of 2018 and 2019 how that instrumental at no time could control the dollars over time. In the end we had clamps and reprofiling. That is why we ask people to be more and more careful, capital must be protected.”
In this regard, Diedrichs adds that Argentina is connected to the world “through a hose, which is the lung engine provided by the IMF.”
In this scenario it says that the Cedears are the most sought after assets by investors who “are not willing to take risks in Argentine stocks.
In addition, the negotiable obligations (ON) in dollars, or dollar linked (papers that follow the official exchange rate), “they are the most sought after titles when it comes to dollarizing portfolios.”
Finally, Pretty also agrees that “a lot of caution” should be exercised for May.
“As for the Cedears does not change my vision compared to the previous month, that is, to opt for international papers that are listed locally in these certificates of the energy sector. It is true that the technology sectors have recovered after the shocks of previous months, and it would seem that the progressive rate hike by the Fed has stopped. However, it is a risk bet”, concludes Quite a bit to iProfessional.-
