Buenos Aires, November 21, 2024 – Argentine stocks listed in New York (ADRs) surged today, with gains reaching up to 6.1%, while the country’s risk premium dipped below 650 points, signaling renewed investor confidence.
The positive movement comes amid a government tender for Letras del Tesoro (treasury Letters), known as TAMAR, offered to April 2026, assuring a roll-over of the title. According to Tomas Tagle of Bull Market Brokers, “Precisely in this tender the letter is offered TAMAR to April 2026, so the roll over of that title is assured. The bulk of the allocation of this bill will go to the banks,but if Finance decides to cut the market using the TAMAR breakeven path,the M30A6 should be at +2%. If, on the other hand, they repeat the logic of the August tender for banks and assume rate stability, the cut woudl be -3.5%, something that would seem punitive for the entities.”
Tagle also noted a preference for bidding in the 2%-3% zone, stating, “We like the letter bidding in the 2%-3% zone given that it is a relatively short instrument and would have an average TAMAR in prices below 29%.” However, he predicts the roll-over will not reach 100%, estimating a need to roll over above 71% to meet current payment obligations.
On Wall Street, ADRs of BBVA (+6.1%), Edenor (+5.5%), and Grupo Supervielle (+4.5%) led the gains.The S&P Merval index rose 1.7% to approximately 2,915,000 units, a 1.3% increase when measured in dollars.
Market analysts at Max Capital anticipate similar pressure on roll-overs in December due to seasonal liquidity needs, forecasting a near 80% roll-over rate. Concerns remain regarding net reserves, with Portfolio Personal Inversiones (PPI) warning of an increasing probability of requiring a new “waiver” with the International Monetary Fund (IMF).
Globally, expectations of continued interest rate cuts by the U.S. Federal Reserve are bolstering emerging market assets. Operators have increased bets on a 25 basis point rate cut next month, with an 85% implied probability, according to CME’s FedWatch tool. Lower U.S. interest rates generally improve the attractiveness of emerging markets like Argentina, offering higher nominal yields and increased demand.
