Argentine bonds slip another 1.6%

Despite offering more attractive rates, Argentine bonds decline did not stop on Tuesday, which in some series reached (as the previous day) to 1.6 per cent. The most affected ones were long-term papers, both in Argentine pesos adjustable by CER (Baseline Stabilization Coefficient) and in dollars.

Par denominated in dollars was strongly hit, falling 1.47 per cent, while BODEN 2014 (in Argentine pesos) lost 1.07 per cent.

BOGAR 2018 (-0.73 per cent) and PRO13 (-1.63 per cent) also slipped. Inflation figures being slightly below prospects deeply affects those who betted on CER-adjusted instruments.

Julio Bruni, an analyst from the Stockbroker Company "Arpenta", explained that "bonds in Argentine pesos offer 7-per cent annual rates above inflation." If we take into account current price projection (around 11 per cent is expected for this year), we realize that betting on domestic papers offers an around 18-per cent annual rate in local currency. Dollar stability at ARG$3.10 may also be an interesting investment alternative, particularly during a turbulent period.

However, operators advise investors to move cautiously because markets are still submerged in a jittery atmosphere. Therefore, even with highly-appealing prices and rates, it is not clear if correction observed since May has ended.

Time deposits

In view of this situation, a lower risk bet can now be found in time deposits in Argentine pesos, since banks are rising rates. It is possible to obtain levels ranging between 8 and 9 per cent annual, if term is extended between four and six months. Although this is not enough to beat inflation, it may be an interesting premium in dollars, particularly when all assets show a falling quote.

Another good option are financial trusts, which also offer a fixed rate in Argentine pesos and in considerably short terms. Yields range between 10 and 12 per cent annual depending on issuer. As regards bonds, shortest-term papers may also be an appealing alternative. BODEN 2008 produces 2.50 per cent annual above inflation. Thus, it can be taken as a time deposit with the possibility of selling it at any time in secondary market.