Since Argentina launched the last official offer until today, dollar bonds performed positively, rising more than 10% weighted. In stocks, we see a more than exciting rise: Merval grew 22% in pesos and 17% in dollars. Among the Argentine shares quoted on Wall Street, instruments grew up to 35.5% in the month (Banco Supervielle). Irsa, meanwhile, grew 32.6% in July.
Due to a more significant easing of restrictions, the economy bounced 10% in May compared to April, as reported this Wednesday by the INDEC. However, the Monthly Economic Activity Estimator (EMAE) showed a 20.6% drop compared to the same month in 2019. In the first five months of the year, the EMAE accumulated a fall of 13.2% compared to the same period last year. In April, the economy had collapsed by 26.4%.
The national public sector ended June with a primary deficit of 3 points of GDP. The data show the deterioration that the pandemic caused on public finances since on the one hand; it generated a drop in resources and on the other, it forced an increase in spending. Revenues rose by only 23%. Economists project a deficit for the whole of 2020 of between 7 and 8 points of GDP.
Argentine shares traded on Wall Street rose to 8.4% while dollar bonds recorded increases of up to 3.9%, which reflected in a sharp drop in country risk. The JPMorgan index fell by 3.5% (83 units) to 2,273 basis points.
In June, a typical family needed to have an income 40.7% higher than in the same month last year to avoid falling into poverty, according to the National Institute of Statistics and Census (INDEC). The monthly increase of the Basic Food Basket (CBA, used to measure indigence) was 0.9%, while the variation of the Total Basic Basket (CBT, used to measure poverty) was 1.7%. The interannual variations of the CBA and the CBT were 45.3% and 40.7%, respectively.
April, with a historical fall, was the floor for the level of economic activity (the economy then contracted by 26.4%). It estimates a collapse in the second quarter of the year around 20%. A rebound is also forecast for the second semester, although it will not reach pre-pandemic levels.
Argentina’s cost of production fell by 0.69% in May compared to April but rose by 5.03% compared to the same month in 2019. The main variables that contributed to the increase were the cost of construction, electricity, logistics costs, private wages, raw materials, labour disputes, interest rates and insurance payments.
Gold prices climbed Tuesday, boosted by a falling dollar and expectations of further stimulus measures to revive economies impacted by the pandemic. It rose 1.5% to $1,842.52 an ounce, its most significant daily rise since early May. Gold futures in the United States, meanwhile, also closed with an increase of 1.5% to US$ 1,843.9 per ounce. Silver surpassed the threshold of $20, in cash climbed 6.4% to $21.18 an ounce.
It estimates that the 50 most enormous fortunes in Argentina, all of them over $300 million, through the participation they have in their multiple companies originate around 14% of the GDP with a strong presence in the fields of energy, telecommunications, pharmaceutical business, retail and financial intermediation.
The conflict between mayors of the ruling party PJ that threatens the company’s concession could ended in another multimillion dollar lawsuit that could cost Argentina $16.5 billion.Reality shows that Argentina always pays. Despite its bad reputation as a payer, it has already paid out billions for expropriations, change of contracts into local currency, and debt in default in international courts, and has at least $8.75 billion in lawsuits pending.