GDP coupon the best of November

November was the best month of 2006 for investors: not only were handsome profits reaped with bonds and stocks, but also dollar slid. The most satisfied investors are those who bet on GDP coupons, because they climbed 16 per cent in dollars and 14 per cent in Argentine pesos. These derivatives are linked to debt swap bonds, but they are traded separately. Coupons are really volatile: they go up and down strongly, since there's great trading around them, that's to say, they are bought and sold on the same day. Those enduring adrenaline for having such an asset received the highest profits of the month.

Behind them, we find leading stocks, which rose 10.40 per cent on average. The most outstanding papers of the month were Pampa Holding's, a real estate and electrical development firm, with a 26.11-per cent hike. This was followed by the bank Macro with 22.47 per cent and Tenaris, with 19.53 per cent. Bank stocks did pretty well thanks to public bond rise. The financial entity BBVA Banco Francés leaped almost 9 per cent.

After stocks, debt swap bonds stood out. Both Par in Argentine Pesos (9.59 per cent) and Discount in Argentine pesos (8.24 per cent) confirmed rally hinted at in October. Throughout the month, they became stronger and broke the psychological ceiling estimated by analysts.

Euro peak

Due to dollar weakness across the world, gold rose almost 7 per cent, while euro leaped 2 per cent. The sole currency settles at its 20-month maximum with respect to dollar.

Post default bonds, which are in medium tranche of the curve over term and rate, showed a good performance, being BONAR 6.7-per cent rise the most outstanding one. Many foreign investors turned to this paper, which rate and duration are considered as bond average. BODEN 2014, in which investors were not highly interested, offered a 4.50-per cent rate.

BODEN 2008 reaped 1.58-per cent profits. However, we should take into account that this bond is the shortest and the most conservative one. Its earnings double time deposits', 0.75 per cent. This paper serves as shelter when there's no volatility in market. Moreover, it is paying amortization and rate.

Bonds in dollars did not show a good performance because there was a robust foreign-currency inflow, reducing quote 0.64 per cent. Investors chose inflation-adjusted bonds in Argentine pesos. For that reason, they settled around 1 per cent.

December is a difficult month for investors, since many operators seek calmness and take profits to enjoy holidays in peace. They collect a "bonus" according to the profits they gave to the entity. Moreover, on December 15, GDP coupons are paid (around 65 cents of Argentine pesos or dollar are collected depending on coupon, every 100 coupons). At the end of December, Discount pays rate. The thing now is to know when enthusiasm will stop, because, although great players may leave, around $390 millions will be collected with coupons and something must be done with that money on the following day; investors won't put it under the mattress. Some will head towards conservative options, but a percentage will seek assets with more rate.

All the same, bonds and coupons have positive prospects ahead, despite some specific fall in December.