Analysts believe that it could start to be a time to build a position in stocks because share prices are so low. The key is in the macro and that is where the biggest unknowns appear.
The Argentine stock market still does not recover and 70% of the 20 shares that are part of the Merval, the leading index of the parquet on the other side of the mountain range, worth less than US $ 1.
Of the total of the 20 shares, Mirgor is the one with the best share (per unit): each share costs US $ 7 adjusted for cash with settlement. It is followed by YPF (US $ 3.5 per share), BYMA (US $ 3.2 per share), Cablevisión (US $ 2.6 per share), Telecom (US $ 1.4 per share) and Banco Macro (US $ 1.3 per share).
In the extreme, the one that is worth the least is Comercial del Plata: US $ 0.016.
Maximiliano Bagilet, portfolio Manager of TSA Bursátil and Julio Calcagnino, market analyst of TSA Bursátil of Grupo Transatlántica, pointed out that currently unusual valuations are being observed in the Argentine market where within the Leader Panel and the General Panel of a total of 70 shares, 60 of them trade below one US dollar.
“Argentine stocks fall into the category of “Penny stock” cash measures with settlement. Further, Companies such as Grupo Clarín, YPF, IRSA Propiedades Comerciales, Central Puerto and Edenor are trading with a Price to Book Value ratio below US $ 1. This implies that the market gives them a valuation below the net between assets and liabilities measured according to accounting, “they indicated.
Regarding whether this is a convenient moment to position oneself, the specialists emphasize that it is a relative question, since this it depends on the short-term economic and political context where uncertainty is practically total.
“While there is a clear opportunity for devaluations in a context of very deteriorated expectations, the risk is also high if the catalysts do not appear,” they commented.
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Besides this, “the uncertainty takes on a certain global scale, which adds an additional share of volatility to the Argentine market. That being said, selectivity is key due to the limited diversification possibilities offered by the local panel. One possible position would be to focus on companies that may be favored by the current economic model, “said Calcagnino and Bagilet.
The key is in the macro
Given that the dynamics of stocks is closely related to the future evolution of the economy, analysts warn that it will be important to determine what will be the macro future that awaits Argentina and therefore, what will be the measures that the government decides to take to redirect the country towards a path of normalization and growth.
A stock trader for a local broker warned that the potential of stocks will depend on the economic direction it seeks to take the economy forward, given the current magnitude of the crisis.
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“To know if we are at an entry point or not, I think it depends a lot on where the macroeconomic course ends up going since I already believe that the situation is quite critical and from here there are two directions. Or it tends to reorganize and normalize the economy, This would indicate that stocks are cheap or on the contrary, we are going towards a disorderly adjustment with more inflation and more devaluation, which could generate a greater decline in stocks and that stocks could still continue to fall. That situation that is so binary He speaks clearly that the actions today are for aggressive profiles and with tolerance to the risk and that it is not about short-term investments but of 2 to 3 years. In that sense, I believe that there are interesting sectors, “said the trader.
According to the latest data, it follows that the exchange rate gap is hurting the real economy. Recently it became known that the speed of the economic recovery is rapidly losing steam. It is perceived both by the EMAE as well as by the deterioration in the trade balance. The real economy is beginning to show the negative impacts of the exchange rate gap and the warning lights are on.
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