Wall Street fears a change in the rules of the game – 25/04/2019

On Wall Street, there is a concern and uncertainty about a possible change of the rules of the game in Argentina and they badure that country risk is now political and not economic. In a conference held at Columbia University for academics, students, lawyers and investors who follow the case of Argentina, the senator has voiced it. Miguel Pichetto; the chief advisers to President Mauricio Macri, José Torelloand several investors. Clarin He gathered the opinion of some financiers who said that the calm of our country would come if the commitments are respected and "Markets do not get married with specific names and do not look for results". For its part, Torello was responsible for dispelling in Manhattan any doubt about the possibility that the governor Maria Eugenia Vidal replaces Macri in the nomination for the presidency. "There is no possibility of a Plan V"badured this correspondent.

Look also

Clarin Bulletins

What happened today? We tell you the most important news of the day and what will happen tomorrow when you get up

Monday to Friday afternoon.

Gerardo Mato, Director of HSBC Global Banking & Markets Americas, participated in a panel discussion on the economic outlook and then Clarin This "country risk" is above all a political risk related to elections. The fundamentals have not changed so much in four months. Today, what they see, it 's uncertainty in investigations and that generates speculation and noise. It's purely political. "

As to whether it is likely that Cristina Fernández de Kirchner wins the elections, she said that "people start to speculate, it depends on who wins, what access they can have to the markets to pay off the existing debt. If they will pay it, they will restructure it, what is the conviction to continue with the same goals that this government has proposed or will change dramatically. The elections in Latin American countries go immediately from left to right and from right to left, which generates a lot of volatility. Above, high inflation and a type of change with a lot of pressure are things that do not help in the daily situation. "

Look also

Asked which candidate would bring the most calm to Wall Street, Mato replied that "whoever complies with the rules and ensure that commitments with Argentina are respected. In fact, I listened to Pichetto say everything they would respect. It calms Wall Street. Beyond what political parties are, there are a series of things that will continue to be respected. There are countries like Chile that do it beyond a political transition: all acquired and committed rights are respected ".

Regarding the difficulties faced by President Mauricio Macri on the economic front, Mato said that "this government has set clear, objective goals that Wall Street has taken with a lot of optimism. different reasons, could not be specified and that it generated a lot of uncertainty. "And, he added:" The objectives do not vary much from one part to the other.The problem is not not the ingredients but the recipe I think that today everyone wants the best for the country Argentina today has some international commitments that it must respect and that is what it is all about If it's a game or the other, if they say they'll respect it, the markets will be quiet. Today, the uncertainty is that someone goes up and declares that it will change all the rules of the game. " Are there fears that Kirchnerism could lead to a defect? "The truth is that I do not know what approach is being taken today. I do not know what Cristina thinks. I do not think anyone knowsSebastián Vargas, of Barclays Investment Bank, was one of those who organized Wednesday a meeting between Senator Pichetto of Alternativa Federal and several investment funds in Manhattan, saying that "all the doubts of the guests were badociated with Investors do not like "all or nothing" scenarios. That's why there is a lot of interest for what other space members think. "

For him, the country risk of Argentina has exploded due to a number of factors. "The US dollar is strengthened overall this week. This implies that emerging currencies are weaker against the dollar and that the Argentine peso is no exception. In fact, in our times, the political and economic repercussions are greater. The world sneezes and Argentina catches a cold. "

When asked if Wall Street was concerned that Macri would lose the elections and if that would support Maria Eugenia Vidal's candidacy, she said: "I can not do this badessment. think that with a name change on the ballots everything is arranged is a huge underestimate. I think that at such high risk levels, the concern is who can provide solutions to problems. "

Vargas does not believe that if Cristina wins, she decides to go to default. "Nobody in the political spectrum has in his head repudiated the debt. The situation is complex enough to incorporate more problems, "he said, as to whether Roberto Lavagna would be a good storm pilot at this stage, he stressed that" when the bonds incorporate a default probability of 50 %, markets do not marry with their own names and look for very specific results. Any candidate who has good ideas and is able to guarantee consensus and the majorities required to produce economic results works. "

Gabriel Torres, of Moody's, on the other hand, believes in the possibility of a scenario of cessation of payments. "I think the markets are increasingly worried that this year's election results may lead to a policy change that will lead to a default, and that explains to a large extent the increase in country risk." refused to answer the candidates.

For Antonio Del Pino, Latham & Watkins, investments have been slowed recently for several reasons. "The macro and micro situation at the moment is complicated to make a new investment.Economic and political stability is essential in a world where investments are very competitive.I think that there is always an interest in the world. Argentina and that investment will come when the stability will be greater.Wall Street and the big global investors have short memory and that is what needs to be done as they have to look for the opportunity and if not They are losing it, I think that with time, they will come, it is a complicated time for Argentina and it must happen. I believe that if the right steps are taken, the investment will come ".

What are the good measures? "To have legal stability, clear rules for investment and greater economic and political stability," he said, adding, "I think the Macri government has took the necessary steps.In fact, I think that three years is short. "

Del Pino believes that a possible government of Cristina Kirchner "could create more uncertainty among investors". He points out that "a new government can change the rules of the game. We have seen this in other countries where new governments change the rules, which sometimes slows or attracts investment, depending on the measures taken. . "

José Torello He was responsible for speaking to the government at the meeting at Columbia University. "Clearly, there is a problem in the financial markets that I believe is due to mistrust of politics," said the head of the presidential advisers, who participated in a panel and was later interviewed by Clarín.

– Do not you wonder about the fact that President Macri's measures do not work?

– If we see the trade balance, the budget deficit, it would work. The problem is inflation, it would be expensive to lower it and it would create discomfort for people and it would lead the markets to question the political continuity of this government, which I have no doubt about. I think that is not true, but it is reasonable that it happens when inflation is high and people are waiting.

– Investors asked if Cristina could have a default?

No, they did not ask me anything about it. Even Senator Pichetto, who spoke yesterday with several funds, said that there was no way to fail, that Peronism did not think of default.

– But Pichetto does not represent Kirchnerism.

– The truth I do not see it. I think that a fault is not suitable for anyone.

– Why do you think country risk increases as much? Is it just an uncertainty? Does candidate Vidal put pressure on Plan V?

–Plan V does not exist. There is no possibility that there is a V plan. In any case, there would be no plan. Mauricio Macri is the presidential candidate and is the captain of a team that has been working in this area since 14 years with consistency, recognizing him as the only possible candidate to be president of the nation.