Brazilian entity BTG PactualThe largest investment bank in Latin America drew optimistic forecasts for Argentine stocks in the short term. “We believe local action can do that It will rise by more than 50% in the next 12 to 18 months. The report concluded that country risks are the main factor.
Argentine stocks are having a very favorable 2024 in the markets. The ADRs of Argentine companies listed on Wall Street offer up to 100% in dollars, as is the case for banks, an exceptional performance by global comparison.
“In an economic stability scenario, we expect domestic inventories to increase +50% – in USD – in the next 12 to 18 monthsDriven by lower country risks, reflecting economic stability and better outlook for structural growth.
After valuations bottomed out during the pandemic, Argentine stocks are on the rise Big profits for three consecutive years Although this trend is not accompanied by domestic macroeconomic conditions, in 2024 it is also driving increases in international comparison, now with the momentum of the shift in economic policy with the arrival of… Javier Miley For the president.
He added: “The midterm elections will also be held in 2025. If the government can maintain and obtain approval rates Good results in the electionsthe possibility of positive changes in the structure of LT (long-term or long term) The economy will improve furtherwhich may provide a Greater growth potential. As the visibility of success improves, and assuming this is the case, companies with appropriate exposure to Argentina should also begin to evaluate the structural improvement of their operations.
It should be noted that the indicator Standard & Poor’s Merval The Buenos Aires Stock Exchange shows the peso has improved by 57% this year – somewhat below local inflation – and 39% in dollars, pursuant to the “cash-to-settle” parity implicit in ADRs operating in New York. Compared to other markets, it’s a notable benefit, given the increases in Wall Street’s S&P 500 (+12%), the tech-heavy Nasdaq (+10%), and the Dow Jones Industrial Average (+6%). The San Pablo Bovespa Index lost 10 percent in the same period.
However, the profit potential set by the Brazilian financial giant for Argentine stocks is conditional on the stability of the economy and the outlook for structural growth of the activity as well as Continuous reduction in country risksThis will allow the government to obtain financing in dollars in voluntary debt markets.
“Country risks have decreased in recent months, but they remain well above the levels reached during the Macri government and compared to their counterparts in Latin America. We do not make any predictions about the evolution of country risks, but it is clear that a Improving macroeconomic fundamentals It can cause new Significant reduction in risk. Improving this genre will be important The driver of rising asset prices“, noted the BTG Pactual report.
BTG Pactual earned net profit of 2,889 million riyals (about 520 million US dollars) in the first quarter, 27.6% higher than in the same period in 2023, the company said on Monday. This is the highest volume of profits achieved by this leading institution in the region during the quarter. According to the financial balance issued by the entity, its total income in the first three months of 2024 increased by 22.7%, reaching a record level of 5,891 million riyals (about 1,144 million US dollars).
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