the stocks and bonds that the market chooses, while looking at the dollar with a sardonic eye

In July, a certain change in trend began to bring relief to investors at least temporarily.

This, after two months in which the capital market has been subjected to strong tensions – internal and external – which have led to in an abrupt low quotations of several shares.

The most eloquent fact is provided by the evolution of the Merval: in the month of July it advanced 12.7%, although in the first week it returned in the equal proportion, the product of the exchange rate that has took the dollar to a high of $ 29.57

The biggest advances of the month corresponded to several papers related to the energy sector: Transportadora de Gas del Norte (TGN) 41% followed by Transportadora de Gas del Sur (TGS), which rose 34%, and Transener, which grew by almost 30%.

The shares of Comercial del Plata (27%) and Cuyana Gas Distributor (19%) (see adro):

Unlike these occasions, only two declines were observed: Aluar, which fell by 4 , 6%, and Tenaris (-2.9%).

In terms of government securities, the scenario was Unlike private papers, declines were recorded in most of those tending to show a higher negotiated volume.

Short-term bonds in pesos are the only ones that had a slightly positive result (1.1%),

In terms of dollarization, the most affected were those in the short term: on average, they have decreased by 4.2%, while long-term ones lost 1.7%.

The declines in July were dominated by the pair in pesos (-6.5%), followed by the Bonar 2020 (-4.8%) and the Bonar 2024 (-4.1%).

In the case of the most conservative investments, the monthly interest rate on term deposits was 2.8%. That of Lebac, at 3.8%.

Thus, they were above an estimated inflation of 2.7% as well as the dollar, which fell by 5%.

For Matías Roig, director of Personal Portfolio, " the balance of recent weeks has been positive since the stability of the US currency has been maintained."

"The exchange rate has not brought any noise to the market.In recent days, reference rates have fallen in the secondary position, country risk has also fallen and bond prices have increased, "he adds

Juan Pablo Vera, of Tavelli & Cía, expresses the same address: ]" Thanks to falling interest rates and falling exchange rate volatility during in recent weeks, expectations are starting to improve. "

What happened during these seven months?

at the resumption of July, the results for investors are still discouraged Tadores

Indeed, the shares listed in the Leading Panel of the Buenos Aires Stock Exchange fell by 2.6%.

From a more detailed badysis, surprising results appear, both on the losses side that increases.

– In the first case, Grupo Supervielle can be mentioned: Its shares fell by 34% in 2018, more than those of Loma Negra (27.3%).

– Cablevisión was not so lucky (-26.8%). Neither those of Mirgor (-23%) nor those of Telecom (-19%) (see table).

In return, among those of good performance, Petrobras and Tenaris are distinguished, with increases above 67% which allowed them to recover from a devaluation of 47%.

Here are the roles of Aluar (+ 30%) and BYMA which, with Cresud, increased by almost 14%

If the result of Merval is considered for the first seven months (-2, 6%) against the devaluation (47%) in the same period, the dollar decline was 34%.

Petrobras and Tenaris, with improvements greater than 67%, were the only ones to successfully overcome the greenback's advance.

The local market experienced a collapse that comfortably outpaced other emerging markets, which, on average, fell by 5%. In the particular case of the Brazilian Stock Exchange, the fall was 11%.

With regard to government securities, those who quote locally were confronted in two months by two opposing forces, since their prices were affected by the mbadive sales but at the same time they took part in the effects of the devaluation. .

Under these conditions, some of them, such as Bonar 2020, 2024 and 2025, as well as the two (series) of the dollar pair, showed cumulative increases of between 21% and 38% ( see box). Regarding the most affected bonds, the pair was led by the peso couple, who resigned around 30%, followed by the local currency discount (-13%).

For less aggressive investments, in the case of fixed term deposits, the cumulative return was 15.5%. For Lebac, 21%, against inflation that has accumulated 19% in the first seven months.

In what to invest

In the future, badysts predict that the financial market and capitals will continue to have the dollar as the main engine

Another key to monitor will be what will happen in Congress with the 2019 budget negotiations and the degree of compliance with the objectives agreed with the IMF. 19659005] In the international order, what the Fed decides on the reference interest rate, the degree of conflict between the United States and China in commercial matters, and what is close to the political panorama Brazilian, will lead to elections. In forecasts, Leonardo Chialva, of Delphos Investment, says, "If the dollar is tamed, bonds and equities may experience the beginning of a new trend."

"Investors seem to now more inclined to take additional doses of risk, even in local currency, "they say at GMA Capital

" We favor dollar bonds because we believe that the current scenario Gabriel Holand, CEO of HR Global, adds : "Beyond the improvement of July, it is a priority to remain cautious in rearming the wallet ]

According to Megainver, those who do not want to take higher risks can opt for 60% in Letes and the rest in Lebac in pesos

. ] On the other hand, for the most tolerant of fluctuations:

– The percentage of investment in dollars could be of the order of 30%, split mainly between Letes and short-term bonds

– The peso could be composed of a mix between Lebac short and Badlar bonds

For investors interested in equities, Balanz badysts recommend targeting the banking sector. In particular, those of Banco Macro and Grupo Financiero Galicia

As regards the "utilities" sector, TGN and TGS stand out in the gas segment. And in the electricity, Edenor and Transener.

"We also find value in Pampa Energía for its diversification into the energy sector," they conclude.

On the side of government securities, they argue: The dollar and the general decline in benchmark rates on the secondary market make it more conducive to taking long-term badet positions.

Within securities denominated in pesos, the stock market leans toward Lebac, although rates fell to 44% in the short tranche.

"Within the hard currency instruments, we see Bonar 2020 attractive (with a yield of 6.59%) Also at Bonar 2021 (7.46%) and Bonar 2024 (7.76%)", they conclude.