Laura Garcia
06/06/2020 - 12:21
- Clarín.com
- Economy
- Economy
They already had their moment and are now trying a luck of return. Everything is served: the stocks, the gap, the expectation of devaluation. They are called "dollar-linked" because they are "tied to the dollar" instruments, although they are subscribed and paid in pesos. The concept is simple: if there is no access to dollars, then at least one hedge of currency risk is not lacking.
There was a time, in the previous stocks, when they knew how to be a boom. And the menu of options more than varied: from fixed terms to provincial bonds and sovereign securities. This return, resurfaced in the hands of large companies and the short-term securities they use to anchor themselves in the local market: negotiable obligations (ON)
With a string of these issues, in which the interest of small savers is seen, the phenomenon begins to spill to the industry of common funds , which these days reconverts products in the "dollar-linked" key or even refloats funds that never They disappeared and are ready again to go out on the court.
Leandro Trigo, CEO of SBS, one of the strong corporate bond issuers (ON), explained to Clarí n: "There is more appetite. More need to cover the exchange rate. All this had completely disappeared. At the beginning of the year , the issues were still Badlar (wholesale fixed term) plus a rate, but YPF was one of the first to try dollar-linked . And it intensified a lot in the last two months. I think we will see more in the short term. "
The last example was the placement of Cresud, this week. In Balanz, also a leader in the segment, Sebastián Money, capital market manager, highlighted something unusual in this latest issue: "There was more retail presence, a new acceptance . Generally, in dollar issues, yes, the Retailers get 30%. But until now they had not been encouraged with dollar-linked. With Cresud we saw 90% of institutional and 10% of retailers and private banking. "
In recent times, there was a succession of these placements, or as they say in the market, an "issue window" was opened. Among those that successfully surveyed the dollar-linked demand are from YPF and PAE to Genneia, Irsa and now Cresud.
How these bonuses work
What is there to know about the "fine print" of the operation of these bonds? In Personal Investment Portfolio (PPI), they review it: interest is paid in pesos at the reference exchange rate determined in the issuance conditions. In most cases, the exchange rate used is the one published by the Central Bank Communication A3500, corresponding to the average of the three business days prior to the payment date.
Balanz's Money, which also jumped on the wave with a dollar-linked common fund, notes another important point: " The minimum to invest is the peso equivalent of US $ 100. We try to keep that threshold as low as possible Today with the purchase of dollars so restricted it is an instrument that gives you coverage against a possible devaluation. But you also have to take into account that it is a market with little liquidity. You buy an ON to keep it . "
The low liquidity or depth of the market implies that if you want to sell it may not be so easy to find a buyer. These titles are generally 12 and 18 months.
At the beginning of May the Central Bank (BCRA) assured in a meeting with the Argentine Industrial Union (UIA) that it is analyzing the possibility of allowing banks that invest in ONs of companies to use them as liquidity instruments for the creation of reserve requirements (the portion of the deposits collected that must remain immobilized, without lending). Moving forward would help give NOs a boost in turnover.
Now how does the dollar adjustment work? In this sense, it is a structure similar to that of UVA indexing , better known today. The issuer offers the dollar adjustment plus a rate. If we take the latest issues, the rate was 0 for PAE and YPF, 5% for Irsa and Genneia and 3.5% for Cresud.
In the market, they explain that this "plus" is not necessarily a reflection of whether the company is a better or worse credit, but rather that there are other variables that intervene, such as the volume that is captured and how it operates in the secondary market. And of course, the expectation of devaluation dictated by the situation. In cases where the rate is 0, it implies that the investor accepts only the currency hedging, that is, the dollar adjustment of his investment.
Regarding the devaluation expectations today, the PPI team highlights the following as a reference: "The implicit devaluation in the Rofex curve is located with a positive slope at levels ranging from 35% for shorter contracts, to 50% annual in the longer term. This goes hand in hand with the crawling peg (slide of the dollar) and expectations of acceleration in inflation for the last quarter of the year. "
Funds are reinvented
The funds industry is punished twice, from reprofiling to the recent regulation that forces it to "de-dollarize".
So much so that the funds called T + 0 or money market (pure liquidity, minimum risk) already represent more than half of the total industry despite their negative real interest rate (yield 17% annual average) but They allow rapid availability for those who want or need to maintain flows in pesos.
Is that the National Securities Commission (CNV) stipulated that they must invest 75% of their assets in financial instruments and negotiable securities issued in Argentina and, exclusively, in national currency. And he put together a schedule so that on May 15, none can have more than 25% of their assets in foreign currency . This applies to funds in pesos and dollars, but which can be subscribed in pesos.
But the industry is reinventing itself. At PPI, which runs an online funds supermarket (it offers products from various managers), they assert that "it is taking advantage of incorporating these ONs and rearming strategies focused on dollar-linked fixed income with the aim of capturing a potential future acceleration of the exchange rate official". This is the case of administrators such as Megainver or Allaria.
The portfolio manager of a leading administrator explains: "We are among those who kept it as an option, we have it for several years. It has its moments. As expected, when there is a large gap and the market begins to discount a devaluation, it is reborn. Now it's growing. We have positive net subscriptions every day, even with the income of some companies . "
Some came out a few months ago, such as AdCap Total Return, which can be subscribed from $ 100 in InvertirOnLine: "It aims to protect the capital in pesos against changes in the exchange rate, that is, it seeks to keep the investor able to buy the same amount of dollars over time, "they explain.
Now, what do they invest in with so few dollar-linked alternatives at the moment beyond the ONs? "In addition to the ON dollar-linked we make exchange hedging strategies, which in the market are called 'synthetic'. This is to buy securities in pesos but you cover yourself with futures", they comment on an administrator.
The advantages of funds as an investment vehicle are that they offer a diversified portfolio of assets and the possibility of an almost immediate rescue, usually 48 hours.
But beyond the dollar-linked label , here the adjustment to the evolution of the exchange rate as in the ON is not guaranteed but rather a product that seeks to maximize exchange coverage with different investment policies is offered. This also implies that they can have superior performance. Although to a lesser extent than before, many have part of the portfolio in MEP dollars or cash, the dollars that are traded on the Stock Exchange, with a gap of 65% compared to the official one.
And finally, the always revisited fixed term . Today there is a dollar-linked version but it is only available for agricultural producers, as a tool designed by the Central Bank so that foreign exchange is liquidated and the value of the crop can be guaranteed.