Argentine “ADRs” fell more than 4% in New York on Monday.
The Argentine government presented its revised bond restructuring offer to the US Securities and Exchange Commission (SEC) on Monday and confirmed that creditors have until August 28 to approve the deal.
ADRs sank on the holiday
In a negative day for emerging markets, the Actions Argentines listed on Wall Street suffered strong declines, some close to 7%, while country risk reached its highest in August, on the same day that the Argentine government presented the new debt restructuring offer to the United States Securities Commission (SEC, for its acronym in English).
Without activity in the local market before the holiday for the passage to the immortality of General José de San Martín, the ADRs of Argentine companies closed almost entirely in negative territory. Stocks led the strong setbacks from the bank BBVA (-6.9%); Telecom Argentina (-5.9%); from Banco Macro (-5.6%); Central Puerto (-5.4%); Corporación América (-5.4%); from Grupo Financiero Galicia (-5.1%); and YPF (-4.9%).
On the side of the few advances of the day, the assets of Cresud (+ 8.8%); IRSA (+ 4.3%); Free Market (+ 2.9%); IRSA Commercial Properties (+ 1.2%); and Globant (+ 1.2%).
Sharing the same trend as most ADRs, Argentine bonds ended with marked declines, so that the country risk rose 0.9% to 2,131 points, its highest level since the end of July.
“Investors are attentive to the closing of the external and local swap, waiting to be able to confirm a high adhesion that manages to activate the CACs and thus avoid having ‘holdouts’, as well as the negotiation signals with the IMF”, evaluated a analyst.
Investors’ glances are also directed at the Government’s economic guidelines, which allow forecasting “a convergence in fiscal and monetary imbalances, accentuated by the pandemic.” In that sense, the market recognizes that “the renewed exchange rate concerns have their epicenter in said monetary and fiscal signals, since if the confidence of economic agents is not improved, and thus the high gaps of 80% are deflated, the chances of new short-term restrictions on in order to protect reserves “.
In the meantime, Argentina’s government submitted its revised bond restructuring offer to the SEC on Monday, confirming that creditors have until August 28 to approve the deal.
The administration of President Alberto Fernández had already published the proposal in the Official Gazette on Sunday, after a presidential decree on Saturday night approved a second round of amendments to the initial offer that Argentina made in April, advancing its efforts to reach a deal.
Argentina and its main creditor groups reached an agreement in principle on August 4 to restructure some $ 65 billion in sovereign bonds after extensive negotiations.
The Ministry of Economy reported this Monday in a statement that it reviewed the terms and conditions of the offer to establish that the principal and interest payment dates on the new bonds will be January 9 and July 9 instead of March 4. and September 4 of each relevant year.
Likewise, the province of Buenos Aires this Monday extended the deadline for its own debt restructuring for 7,000 million dollars until September 11.
The fall in Argentine stocks on Wall Street occurred on a negative day for regional markets, among which the drop in the Brazilian stock market stands out, which hit a one-month low
Pessimism prevailed on the São Paulo Stock Exchange on Monday, when the benchmark Bovespa index closed below 100,000 points, at a month-low, pressured by bank stocks. The Bovespa fell 1.79% to 99,536.75 points, according to preliminary data. In the foreign exchange market, the real lost 1.26% to 5.4959 units per dollar.
Wall Street, with a new record on the Nasdaq
Shares linked to the technology segment on Monday encouraged the Nasdaq on Wall Street to close at all-time highs, while the S & P500 flirted with its own records, as investors turned to the sector that has shown the most resilience during the coronavirus crisis.
Chipmaker Nvidia Corp’s shares were among the notable gains on the Nasdaq and the S&P after analysts raised the price target for the company’s shares ahead of quarterly results expected on Wednesday.
The benchmark S&P 500 index was just shy of its intraday all-time high on February 19 after hovering around that level for much of the past week. The Dow Jones was hit by losses in financial and industrial stocks.
In June, the Nasdaq became the first of the major Wall Street indices to recoup the losses induced by the coronavirus, as several of its main components, including Amazon.com Inc and Netflix Inc, benefited from restrictions on the social activity.
“Technology is the only thing traded”, said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma. “Things that were 10 years away on February 18 are here now: distance learning, seeing your doctor through Zoom, ordering pharmaceuticals by mail.”
Household chains Lowe’s Cos Inc and Home Depot Inc posted significant increases before releasing their earnings figures this week. The two companies are expected to have received a boost in their quarterly sales as consumers focused on making repairs and improvements to their homes.
The Dow Jones industrial average lost 0.3% to 27,845 units; while the S & P500 rose 0.3% to 3,382 units. Meanwhile, the Nasdaq Composite Index gained 1% to 11,129 units.
Investors are adjusting their portfolios for expected market movements ahead of the US presidential election, in a season that will officially begin with this week’s Democratic National Convention.
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