September 21, 2014
‘Blue’ dollar drops 20 centsWednesday, July 30, 2014
Markets see bullish activity as debt talks drag out
Up to 192 million pesos were traded in the Merval, which reached 8,356 points and accumulates a six percent increase so far this month. Sixty-five shares rose, while 11 dropped and three were steady. Edenor spearheaded the jump, rising 9.92 percent , followed by Grupo Financiero Galícia (9.89 percent), YPF (6.50 percent), Irsa (11.79 percent) and Petrolera Pampa (10 percent).
“The market saw the long meeting as something positive, compared to the previous one that had been short. The payment to the Paris Club could have also been taken as a positive sign. It was an unusual day with a large volume of cash traded,” Santiago Llul, vice-president of Futuro Bursátil, a brokerage firm, told the Herald. “In cases such as this one, people usually choose to sell their bonds and get their cash. But yesterday we didn’t see that.”
A similar trend was seen on Wall Street, where Argentine companies saw steep increases, headed by a seven percent hike for Banco Galícia. Pampa Energía rose 5.5 percent, followed by IRSA (5.7 percent), Edenor (4.8 percent), Macro (4.4 percent), Banco Galícia (0.17 percent) and Banco Francés (3.59 percent).
“The market has asked for an arrangement. The day started calm with ups and downs but after the news of a longer meeting everything started going up,” Alexander Zawadzki, a trader at the Schweber brokerage firm, told the Herald. “During this whole negotiation, shares and bonds never had default prices. The market always wanted an agreement and even in the worst parts of the negotiation drops were low.”
Public bonds also went up, but less than the shares in the Merval and in Wall Street. Bonar 2017 rose 1.5 percent, Discount in pesos 6.1 percent, Discount in dollars 5.6 percent, Par 4.1 percent and Boden 2015 1.6 percent. At the same time, GDP bonds rose an average 6.4 percent.
“Many investors didn’t want to buy anything in the past few weeks because a deal was far away but now since it’s closer they’ve started buying again. There were a large number of buyers yesterday,” Llul said. “They don’t want to risk the hike that would be registered on the market if an agreement is reached.”
After rising 40 cents on Monday, the “blue” or illegal dollar dropped yesterday 20 cents and closed at 12.80 pesos. The exchange rate is 26 cents lower than the record exchange rate registered on January 23, when the peso experienced a steep devaluation. On the other hand, the official dollar rose one cent and closed at 8.21 pesos in banks and exchange houses, while the blue chip swap closed at 10.26 pesos.
The Central Bank’s foreign reserves rose US$1 million and closed at US$29.014 billion, after dropping US$695 million on Monday due to the debt payment to the Paris Club.