In the wake of the approval of the Bases Law, Argentine papers experienced a decline in global markets. The bonds saw a retraction of around 0.2%, while shares started falling last Friday after a correction in prices following an increase of up to 11% on Thursday.
The most significant casualties were recorded in Pampa Energía, which saw a drop of 3.5%. Supervielle bank, Transportadora Gas del Sur, and Irsa also experienced declines of above 3%. Only Tenaris (1.7%) and Corporación América (0.4%) showed positive data in this trading session. So far in June, all ADRs are in the red, with Cresud showing the worst result with a decline of 17%.
In these falls, Argentine assets are distancing themselves from what is happening with North American assets, with the Dow Jones rising by 0.3%. Economist Gustavo Ber noted that “the main ADRs currently register average decreases of 1.5%, with the correction focusing on banking and energy papers, which continue to be preferred by operators to quickly manage exposures.”
Ber further added that “bonds are also weaker, losing an average of 0.2% in their dollar prices among the main references with NY legislation, despite the positive scenarios that could lead to a strong upside if the economy is well managed among investors.”
During the local holiday, ADRs and bonds in dollars appeared more cautious after the positive reaction to the approval of the Bases Law and fiscal package. While some relevant chapters still need to be discussed in Deputies, it was considered a political and economic victory to consolidate fiscal balance.