Bourses dodge Shanghai 8% drop

The almost 8-per cent fall of Shanghai Stock Exchange only affected bourses during the first trading hours. Shortly after, stock exchanges rallied (Wall Street ended 0.06 per cent up), since most global investors in China are not exposed to decisions adopted by Hu Jintao administration. For that reason, the remaining Eastern markets did not fall either.

All the same, Shanghai's retreat for the fourth consecutive time discouraged Argentine investors during the morning, reacting at midday.

Bond trading was quite significant. Between the Electronic Over-the-Counter Market (MAE, in its Spanish acronym) and Buenos Aires Stock Exchange, ARG$2.3 billions were traded. Peso-denominated bonds rose slightly. "Everybody is waiting for May's price index," Rafael Ber from Argentine Research stated. Investors are afraid of INDEC manipulation and of an unreal cost-of-living rise.

"Maybe Mauricio Macri's electoral victory makes government more conscious and it stops meddling in price indexes," a trader stated, a remark sounding more like a wish than reality.

The best

GDP coupons showed the best performance, by rising 1.50 per cent to ARG$13.50 and touching ARG$13.80 in spot market.

"GDP coupon pays 2.80 this year and 2.50 the next one. There are reasons for it to settle at these values. We'll see," Rafael Ber signalled.

Peso-denominated Discount (main swap bond) leaped 0.15 per cent. However, what's remarkable about this paper is its resistance to fall. A few days ago, it was retreating to ARG$146, now, it may hardly lower from ARG$151.

Several great investors saw this movement. For that reason, during the last part of session, strong purchase orders came up from those willing to rearrange their portfolios by incorporating these long-term bonds, which have been the greatest victims of INDEC effect.

All the same, market is going through an optimistic period. "Rise of US Treasury bonds' rate has severely hit all emerging countries, except for Argentine bonds," Rafael Ber pointed out.

Post-default peso-denominated papers posted widespread hikes, ranging between 0.20 per cent and 0.50 per cent. However, dollar-denominated BODEN barely moved and its prices remained unchanged. BODEN 2012, always moving more than ARG$20 millions daily, only made ARG$946,000 yesterday.

Falling dollar

Stillness of dollar-denominated papers is related to sharp fall of the American currency in wholesale market, despite strong purchases by Argentine Central Bank (BCRA, in its Spanish acronym).

Yesterday, the monetary authority bought more than $80 millions, raising reserves to $40.79 billions. However, it failed to prevent dollar from lowering to ARG$3.073 in Forex-MAE (main wholesale market where banks trade). In exchange agencies, it continued at ARG$3.10 for sale, though it may slide to ARG$3.09 any time.

After 11 a.m., dollar began to fall sharply till the end, since exporters were bringing handsome amounts of dollars into the country. Trading climbed thanks to this dollar inflow: $314.10 millions were traded in Forex-MAE and $143 millions in MEC (money changers' market).

In futures market, dollar also plummeted. The American currency quoted in MAE at ARG$3.0715 for the end of June and at ARG$3.095 for the end of the year. At the beginning of 2007, dollar used to quote at ARG$3.21 for the last day of December.

Dollar ended with a high selling trend for today, since sale orders stood out after close. There are $70 millions in offer and $15 millions in bid.