Re: TVPP TVPA TVPY Cupones Vinculados al PBI
Publicado: Vie May 13, 2011 10:38 am
No siempre tiramos buenas noticias
Fuente: RBC
EM currents: Argentina, a bumpy road ahead
May 12, 2011
• Political risk will be a major driver for Argentine assets heading into October’s presidential election
• Progress on inflation reporting is unlikely before the elections
• The government’s ability to service its debt remains supported by strong FX reserves as well as elevated soft commodity prices
• Argentine debt has the highest beta to global markets among major LATAM markets. We recently shifted to UnderWeight, consistent with our EM strategy bias and caution ahead of the elections
Public Finances / Debt Sustainability
Argentina’s external debt maturities over coming years are comfortably covered by the country’s FX reserves, and we expect no problems in “capacity to pay” over the next couple of years (see Graph 4).
The country’s public debt to GDP ratio (41.8%) would not be troubling for a country that followed more prudent policies and as a result had more stable/reliable access to capital markets. However, unlike the debt of other LATAM sovereigns, the dedicated investor base for Argentine debt is limited, making it highly vulnerable to swings in global risk appetite.
Although Argentina’s public finances look strong for a single B rated country (S&Ps B, Moody’s B3, Fitch B), the combination of an unorthodox economic policy mix leading to investor mistrust, and lack of a dedicated investor base to hold the country’s debt during ‘risk-off’ periods results in a very high dependence on global risk sentiment. Among major LATAM countries Argentina’s debt is the highest beta to the S&P500 index, leaving it very vulnerable to a correction in global risk appetite. We recently shifted our Global EM tactical strategy bias back to defensive (see: “EM Strategy Update: Tactical Shift to Defensive on Growth Risks”; May 5, 2011), and accordingly turned bearish on Argentine debt.
Consistent with our more defensive tactical view, we turned defensive on Argentine GDP warrants as well. Our Monte-Carlo simulation model suggests that the USD GDP warrants’ fair value is somewhere between US$17.0-US$17.5 (currently 17.0), but their high beta nature makes them vulnerable to shifts in risk appetite. In addition, with the end of QE2 looming, UST directional risks and their potential impact on the discount rate used to value warrants, we believe it is prudent to maintain an UnderWeight allocation.
abrazo
salva +3
Fuente: RBC
EM currents: Argentina, a bumpy road ahead
May 12, 2011
• Political risk will be a major driver for Argentine assets heading into October’s presidential election
• Progress on inflation reporting is unlikely before the elections
• The government’s ability to service its debt remains supported by strong FX reserves as well as elevated soft commodity prices
• Argentine debt has the highest beta to global markets among major LATAM markets. We recently shifted to UnderWeight, consistent with our EM strategy bias and caution ahead of the elections
Public Finances / Debt Sustainability
Argentina’s external debt maturities over coming years are comfortably covered by the country’s FX reserves, and we expect no problems in “capacity to pay” over the next couple of years (see Graph 4).
The country’s public debt to GDP ratio (41.8%) would not be troubling for a country that followed more prudent policies and as a result had more stable/reliable access to capital markets. However, unlike the debt of other LATAM sovereigns, the dedicated investor base for Argentine debt is limited, making it highly vulnerable to swings in global risk appetite.
Although Argentina’s public finances look strong for a single B rated country (S&Ps B, Moody’s B3, Fitch B), the combination of an unorthodox economic policy mix leading to investor mistrust, and lack of a dedicated investor base to hold the country’s debt during ‘risk-off’ periods results in a very high dependence on global risk sentiment. Among major LATAM countries Argentina’s debt is the highest beta to the S&P500 index, leaving it very vulnerable to a correction in global risk appetite. We recently shifted our Global EM tactical strategy bias back to defensive (see: “EM Strategy Update: Tactical Shift to Defensive on Growth Risks”; May 5, 2011), and accordingly turned bearish on Argentine debt.
Consistent with our more defensive tactical view, we turned defensive on Argentine GDP warrants as well. Our Monte-Carlo simulation model suggests that the USD GDP warrants’ fair value is somewhere between US$17.0-US$17.5 (currently 17.0), but their high beta nature makes them vulnerable to shifts in risk appetite. In addition, with the end of QE2 looming, UST directional risks and their potential impact on the discount rate used to value warrants, we believe it is prudent to maintain an UnderWeight allocation.
abrazo
salva +3
