Markets: while Wall Street took profits, Argentinean shares rose up to 12% in dollars

New York indexes gave up to 0.7% due to concerns about China’s growth. Argentine stocks sustained the 2023 rally on the back of electoral expectations.


New York stock markets traded with losses on Tuesday, in a range of 0.2% to 0.7%, while Argentine stocks defended the positive bias. In the region, the São Paulo (-0.3%) and Bogota (-1.1%) stock exchanges also traded with losses.

After a holiday on Monday, stocks on Wall Street fell as investors were cautious about potential “headwinds” to the recent rally, as concerns grow about the health of China’s economy, the world’s second largest.

Markets are also bracing for Federal Reserve (Fed) Chairman Jerome Powell’s testimony before a U.S. House of Representatives committee starting Wednesday, looking for clues on whether lawmakers will resume their rate hike campaign in July.

Despite the adverse context, most of the ADRs and shares of Argentinean companies traded in dollars on Wall Street rose again on Tuesday. At the close, Cresud (+11.6%), Edenor (+10.9%) and IRSA (+9.2%) led the improvement.

Source: Rava - prices in dollars.
Source: Rava – prices in dollars.


It should be recalled that the Argentine Stock Exchange will resume trading on Wednesday, after the long long weekend, which included the commemoration of a new anniversary of the creation of the national flag.

The Argentine Stock Exchange ratified its upward march on Friday, reaching a new all-time high, supported by a recurrent appetite for global risk and hedging against high inflation, prior to the four-day financial inactivity.

Investors are awaiting progress in the renegotiation of the country’s program with the International Monetary Fund (IMF), for which the Minister of Economy, Sergio Massa, will travel next week to Washington for new negotiations within days of covering obligations with the organization for some 2.7 billion dollars.

“There are Argentine assets that, when converted into dollars, yield very tempting prices and that is where the market is grabbing hold with the leadership of energy shares,” a private bank operator explained to Reuters.

The Merval index of the Argentine Stock Exchange has risen 102% in pesos and 37% in dollars so far in 2023, according to the “contado con liqui” (cash with liquidity) quotation.

Local activity is also conditioned by political uncertainty, almost a week before the official announcement of the presidential pre-candidates for the August primaries and the vote in the October general elections.

An inflation rate of around 8% per month and the lack of certainty regarding the economic policy that will be implemented after the elections were unexpected catalysts for Argentine stock valuations, which this year are the preferred investment bets, given the low quotations -in historical comparison- and their use as hedges in the midst of devaluation processes.

On Friday, the S&P Merval panel of the Buenos Aires Stock Exchange comfortably surpassed 400,000 points and extended to more than 100 percent the accumulated gain so far in 2023.

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