Sunday , February 28 2021

The star of the summer: why the stock market rose 20% in dollars so far in January

During 2018, Argentine assets were within the group of emerging markets punished by the outflow of capital with expectations of increases in US interest rates. In addition, they led the group, with the Argentine peso depreciating slightly more than 100%. In the stock market, this turbulence exchange generated loss of 50% in the value of Merval throughout 2018.

So far, in January, the month that left the wheel today to mark an official closing, the main panel of the Stock Exchange (the S & P Merval) rose to 36,039 points. Regarding the starting point of the year, when the total price of private shares reached 30,292 units, the increase was 18.9%. In dollars, this jump was 19.7%.

Analysts point out that in the current context of "good financial news", consisting of stable exchange rates, low interest rates and a country risk that for most of the month showed falls, Merval data stand out as the star So far this summer mainly motivated by external factors.

The closing of the wheel yesterday marked a 1.5% increase compared to Tuesday, led by increases in the Supervielle Group (4.19%), Aluar (3.49%), ByMA (2.83%), Banco Francés (2.54%) and Tenaris (2.29%), according to data from the Stock Exchanges and Markets of Argentina.

In the foreign market, in turn, Argentine ADRs, listed on Wall Street listed stocks, showed similar increases, with Supervielle (3.8%) and MercadoLibre (3.1%).

"Argentina is being coupled with the improvement of markets seen in the international scenario. January for emerging countries in general was a good start for the year triggered by the ad rate by the US Federal Reserve, "he explained. Fernando Baer, ​​analyst at Quantum Finance. The latest releases from the US monetary authority generate an expectation in the 2019 international market with lower increases in benchmark rates.

In this sense, the improved conditions for emerging markets had an additional factor for Argentina in the assumption of Jair Bolsonaro as president of Brazil, according Christian Buteler, from Buteler Financial Services. The analyst expects the Bolsonaro effect to positively influence the region after 2018, in which Latin America was one of the most affected areas.

Among other variables, the positive international influence can be observed in the downward trend that country risk showed during the first weeks of January, despite the fact that in the last three wheels the premium applied to sovereign bonds increased. "Generally, there tends to be a negative correlation between country risk and the price of Merval: when you go up, the other tends to descend and vice versa, "commented Amilcar Collante, CESUR (Center for Economic Studies of the South).

The economist considered that a country risk of disadvantage benefits large companies with access to international markets. Many of which are listed in the S & P Merval. "Now we are in a process of return to the environment, the market has anticipated the disadvantage at the time and is now doing the same," added Collante.

Analysts do not rule out a possible turning point, as the political factor, that is, the presidential election, begins to weigh more. "On the domestic front, macroeconomic problems have not disappeared," Buteler summed up, "in addition to a kind of change that has stabilized, there have been no major changes."

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