Argentine ADRs Surge While Bonds Decline Amidst Rising Country Risk
Buenos Aires - Argentine American Depositary Receipts (ADRs) experienced significant gains today,led by strong performance in the financial sector,even as Argentine bonds fell and country risk climbed above 650 points. The gains in ADRs offer a contrasting signal to ongoing concerns about the country’s economic outlook as key banks prepare to release their third-quarter financial results.
The S&P Merval, Argentina’s leading stock index, rose 0.5% to 2,865,760.19 points, while its hard currency equivalent yielded 0.3% to 1,883 units.Though, the most notable upward movement occurred in Wall Street-listed ADRs, with Supervielle Group climbing 5.8%, Galicia Financial group rising 4.5%, and Banco Macro increasing by 3.7%. This surge indicates a current preference for the financial sector among investors.
The market is closely watching the release of third-quarter balance sheets from argentina’s major banks. BBVA Argentina, Grupo Financiero Galicia, and Grupo Supervielle will report this Tuesday, followed by Banco Macro on Wednesday. Market expectations are generally pessimistic, anticipating weak results reflecting the sector’s challenges in recent months.
Galicia Financial Group already released its figures, reporting a quarterly loss of $87,710 million attributed to increased regulatory pressures and integration costs related to its acquisition of HSBC.Despite this quarterly setback, the bank maintains a positive cumulative balance for the frist nine months of the year, totaling $259,223 million. The integration expenses reached $105,343 million net during the quarter.
Despite the positive ADR movement, Argentine bonds faced downward pressure, contributing to a rise in the country’s risk premium, which closed above 650 points. This divergence highlights the complex and often contradictory signals emanating from the Argentine financial markets.
