Country risk falls to below 510 points

Argentina's country risk index fell below 510 points this Friday, marking a shift after weeks of rising levels driven by international conditions and a more positive outlook on the nation’s economy. The indicator, compiled by JP Morgan, dropped 26 points to 506 basic points, according to screens from Rava. This decline followed improved performance in sovereign bonds, which turned green today. Local law bonds rose up to 2.5 percent (AL35D), while global bonds climbed up to 2.4 percent (GD35D). The movement reversed part of the increase recorded during the first three trading days of the week, which had pushed the index to 532, the highest level in the last three months. However, it still remained 26 points above its previous week's close (480) and did not break through the 500-point threshold. Over the course of August, the index has accumulated a rise of 73 points, representing a 17.7 percent increase. Juan Manuel Franco, chief economist at Grupo SBS, noted that sovereign dollar-denominated bonds rebounded after several sessions of declines. He observed that they were affected not only by an adverse international context for fixed income but also by volatility in interest rates, lower purchases by the Central Bank of Argentina (BCRA), and confidence indicators that have yet to recover. Martín Polo, another economist, assessed that the drop in the country risk index today was due to a better international environment and positive economic data published this week. These developments gave the economy a "more positive tint," as it is not in recession but also not growing significantly. Market caution persists regarding the future and financial fluctuations. At the same time, he evaluated that local assets suffered greatly this month, somewhat dragged down by global trends. Argentine stocks traded positively both on Wall Street and in the local market. Shares listed on the New York Stock Exchange (ADR) showed gains in line with major U.S. indices. Banco Supervielle led the group with a 7.5 percent increase, followed by BBVA (+2.2%), Grupo Financiero Galicia (+2.1%), and Edenor (+2%). Locally, the Merval index rose 1.6 percent to 2,921,654.05 units, equivalent to $1,839.46 measured in cash settlement dollars (+1.2%). The main gains came from Banco Supervielle (+7.9%), BBVA (+3%), and Banco Macro (+3%). The official retail exchange rate remained stable in the final session of the week. The official peso-dollar rate appears on the Nation Bank's screens at $1,515, the same value registered since Tuesday. Looking at the selling prices of other financial institutions, the average market price is $1,519.16, according to the daily survey conducted by the BCRA. The wholesale exchange rate also showed no changes, quoting at $1,497.55, below the government-imposed ceiling of $1,500. It is currently 20 percent below the band exchange rate ceiling set today at $1,868.54. The MEP dollar appeared on screens at $1,527.73, while the cash settlement (CCL) operates at $1,586.27, $5.60 higher than the previous close.