Contrary to the trend observed in the world's stock markets, the S&P Merval index of Argentine Stock Exchanges and Markets (BYMA) fell 1.4%, to 46,736.74 units, affected by the collapse of 9.7% of Cablevisión's shares and 8.3% of Telecom's shares.
Through DNU 690/2020, the Government ordered on Friday after the market closed that the services of Cellular telephony, internet and pay television are declared public services, and decided to freeze their rates until December 31, at a time when five months of restrictions in the country due to the Covid pandemic have been completed. 19. From now on, ENACOM will be the entity in charge of authorizing the increases.
The recent increase in fuel prices and some reports that there would be a reduction in subsidies had begun to install the idea in the market that some service provider companies may begin to rebuild prices. In turn, given that the freeze on utility rates expired on August 31, the market expected a previously announced 10% increase to materialize. But those expectations were stopped with the presidential DNU.
"The first impact of the news was like a kind of cold water bucket, since it was felt against the expectations that the market was doing," said Ámbito Juan Ignacio Abuchdid, president of Invertir En Bolsa (IEB).
According to Abuchdid, “Telecom Argentina in particular is affected by the official decision on EBITDA (earnings before interest, taxes, depreciation and amortization) for 2020, but also the market will begin to reformulate a new ´target price´, taking into account a more complex scenario to adjust their prices. ”
The roles of Cablevisión and Telecom were " destroyed by the rate freeze and the little forecast that the Government will modify this situation in the short or medium term ", Emilse Córdoba, Director of Bell Bursátil, commented to that medium.
The specialist suggested that " at this time, to maintain these active in portfolio, you have to think about it in the long term. "
The news not only affected the price of Telecom Argentina and Cablevisión Holding in the local market, but also infected Cresud (-4.9%) ; and to Edenor (-4.4%), and to a lesser extent the rest of the stocks that make up the leading index.
On Wall Street, for their part, Argentine stocks suffered the majority of marked setbacks, in some cases greater than 7%. On the podium of the most pronounced casualties appeared the papers of Telecom (-7.1%); of Cresud (-6.8%); and Edenor (-5.4%).
On the other hand, the market was keeping an eye on the closing of the debt swap in foreign law dollars for about 65,000 million dollars, which ends until 28 December. August. "After the agreement with the main groups of bondholders, the key to follow will be if the necessary majorities are reached to execute the collective action clauses and thus ensure that there are no 'holdouts'", said Roberto Geretto, economist at the CMF bank.
"The market was already in 'cautious mode' waiting for the exchange and signals about the post-pandemic economic program - especially regarding the normalization of monetary and fiscal variables - to which the recent announcement of intervention in the telephone sector it does not help to generate confidence in investors ", he added.
Bonds and country risk
In the fixed income segment, the main Argentine bonds in dollars most traded fell to 2.5% (AY24D and AO20D), within a restricted operation due to the debt exchange process, which reduces the availability of securities until the exchange is completed and therefore the new bonds are credited.
framework, the Argentine country risk measured by the bank JP.Morgan fell 0.4% to 2,144 basis points.
Wall Street, with new records
The S&P 500 and the Nasdaq climbed to new closing records on Monday, when optimism for Potential medical breakthroughs in the war against the coronavirus pandemic sent Wall Street's top three indices soaring.
The benchmark S&P 500 recovered its February closing high last week, confirming a bull market and the fastest recovery from a bear market on record.
The Dow Jones, while leading Monday's gains, remains around 4.2% below its all-time high, and down accumulated of 0.8% so far this year. The Nasdaq and S&P 500 have risen 26.8% and 6.2%, respectively, since the close of the last session of 2019.
The Dow Transportation Index Jones often regarded as a barometer of the health of the US economy, outperformed the overall market.
Markets around the world received a boost from the new advancements in the global race to combat coronavirus, including an announcement by the Food and Drug Administration (FDA) that it had granted an emergency authorization for the use of patient plasma recovered as a treatment option. However, the World Health Organization expressed skepticism about the treatment due to the "low quality" data.
Investors will pay close attention to the monetary policy comments of the chairman of the Federal Reserve of States. United, Jerome Powell, at this week's Jackson Hole symposium, to be held this year in virtual format.
The Dow Jones Industrial Average gained 378.13 points, or a 1, 35%, at 28,308.46 units; and the S&P 500 was up 34.12 points, or 1%, to 3,431.28 points. Meanwhile, the Nasdaq added 67.92 points, or 0.6%, to 11,379.72 units. Of the top 11 sectors in the S&P 500, only health care ended lower. Energy and finance stocks had the biggest percentage gains.
* Ahead of its 4-to-1 stock split on Friday, Apple Inc. - up 1.2% - gave the biggest boost to S&P 500 and the Nasdaq, rising above $ 500 days after becoming the first US public company to exceed $ 2 trillion in market value.