Ana Clara Pedotti
05/05/2021 6:01 AM
Clarín.com
Economy
Updated 05/05/2021 6:01 AM
The Buenos Aires stock market is no longer what it used to be
.
The volume traded in the Merval index is at a minimum of more than a decade and the prices of the papers that are traded in the local market have also bottomed out: however investors do not find in these
"outlet" prices
an incentive to return to invest in Argentine stocks.
What do those who previously traded on the Merval index invest in?
Although there is surely no single answer,
Cedears' trading volume
is a good indicator: on average it already represents
80% of what is traded on the local equity market.
An accelerated migration
The S&P Merval is an index that reflects the
evolution of a set of leading stocks,
which are the most representative of the local market, that is, those papers that generate the most volume of operations.
In the last two decades it
only fell below the 300 point zone in two moments
: first in the 2001 crisis and later due to the effects of the 2008 global financial crisis.
In the last three years, a host of factors
wiped out Merval prices.
At the
beginning of 2018,
the stock index had reached a new maximum, which fell sharply after the balance of payments crisis that the country experienced since March of that year and which led to the request for assistance to the International Monetary Fund made during the Past government.
"There were
three moments
that explain the prices and the level of operations that we see in the Merval these days: first,
the exchange run of 2018
, then the collapse of Argentine assets
post PASO in the second half of 2019
and finally,
the effect of the
coronavirus
pandemic
on the economy in 2020, "explained José Ignacio Bano from IOL. "The valuations of the companies also plummeted in this period:
there are companies that are now worth a tenth of what they were worth at the end of 2017.
That impacts on the volume traded as well."
The numbers that the local stock market manages these days are eloquent:
"In April, an average of US $ 4.3 million per day was traded in local shares
, when in 2019 the average was US $ 16.4 million per day, and in 2020 US $ 8.9 million per day, "said Santiago Abdala of PPI.
Alternatives
The decline in investor interest in the shares of local companies was accompanied by new investment alternatives. "While Argentine stocks have not stopped falling in the last three years,
Wall Street stock indexes have soared
. The perception for the Argentine investor is that
there are good opportunities in the equity market, but abroad,
" said Bano. "During this period, the
operations with Cedears
were greatly simplified
, which allows investing in foreign assets in pesos from the local stock market and also the options to invest directly in the New York Stock Exchange," Bano said.
At this point, Abdala agreed: "In the
last 18 months
, our clients' demand for solutions that cover international assets has been growing steadily".
Pablo Haro, from the SBS Group, explained: "In the last months
of every $ 100 traded in variable income, approximately $ 70 corresponded to cedears
and $ 30 to local shares". For the specialist, this growth is closely related to two factors. "On the one hand, the wide range of international shares that can be acquired through the cedears program, which makes this instrument more attractive by allowing it to build a highly diversified portfolio. In turn, this would not be possible without the presence of the robots that are permanently arbitrating the squares and granting liquidity to the market, "said Haro.
The demand for these instruments still seems to have no ceiling.
"Going forward, we believe that the trend in volume growth will continue to consolidate. As investors become aware of the advantages and opportunities of investing in international companies, they begin to have greater confidence and greater predisposition to increase exposure to cedears within their investment portfolio, "added Haro.
Buying opportunity?
Despite the
notably lower prices
of Argentine companies, investors who have exited in recent years
are reluctant to re
-enter the local equity market. "The political and economic uncertainty in the country has been generating a significant
aversion to Argentine risk
, which is impacted on the volume of business of the Leader Panel. Local stocks are at extremely low levels, which although in the long term could have an important upside, short, the
absence of immediate drivers and a "health gap"
significant with the more developed countries generates that many investments go towards foreign securities ", explained Lucas Yatche, Financial Advisor of Liebre Capital." Beyond the fundamental analysis of the different titles, the recent performance of Argentine assets and the expectations towards future damage to the levels of operations, "he added.
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