Amid the swings of monetary policy and political uncertainty, Argentina was included in the MSCI of emerging markets. This confirms the decision that the investment agency had anticipated in June 2018, when it announced that it would raise the country in category. Also today will be detailed which are the Argentine companies that will integrate the index. It is estimated that there are about a dozen companies.
Although the approval was announced today, the new qualification will only begin to take effect on May 28. The first step in this direction had already taken place almost a year ago, when it was announced that Argentina was entering the previous phase of this process. At that time, the dollar was trading at $ 25 and the first agreement with the IMF came into effect.
The process with the MSCI continued its march despite the dollar and inflation escalation, the changes in the agreement with the IMF and the multiple variations in the monetary policy scheme. What was decisive so that the requalification was not reversed was that the Government maintained its position of not blocking the movement of capital.
Argentina had been considered an “emerging market” until 2009, when it lost that category and was reclassified as a “frontier market” due to the various restrictions that existed at that time for the entry and exit of capital. The category of “frontier market” prevents several institutional investment funds from buying Argentine stocks or bonds. In this way, the reclassification influences the investment decisions of operators and analysts who manage global funds
At the moment, Argentina will also be listed in the border market index, in which it is currently listed. Thus, the country will be included in the two indices – the frontier and the emerging index – at least until August.
The companies that will integrate the index are some of those already listed on Wall Street, under a figure known as ADRs. Today all these companies are facing strong declines in their price, with banks leading the losses with losses ranging from 8% to 2.5%. Several of these shares have been showing strong rises in what is going to this month, in what was read as an “anticipation” of the market to the decision of MSCI to include them in the list of emerging.
According to the analysts, among the papers that have more chances to enter the index are YPF, Telecom, the banks Galicia, Macro and BBVA Frances, and the energy companies Pampa Energía, Transportadora de Gas del Sur and Central Puerto.
But in addition, there is another index of global ADRs where the expectation is that six Argentine companies will be incorporated. Among the likely ones would be Globant, Arcos Dorados, IRSA and Despegar.
For economists, the rise of Argentina to the emerging market will have a relative impact “due to political and economic uncertainty”.
Financial analyst Christian Buteler told Telam that the requalification “occurs in a context in which Argentina is clearly a seller of all its assets, which is good news may not have a really important impact as would be expected at another time” .
Anyway, Buteler stressed that it is something “positive because outside they see you better, there are other funds that can enter to invest in your assets”. He specified that at this moment “the investors are leaving and not entering, and only this fact (the rise to the emerging market) will not change this trend”.
Santiago Llull, vice president of Futuro Bursátil, said that “since the news was given, the dollar changed the price a lot, beyond the political uncertainty that we have, if an investor analyzes history, Argentina always comes out and always ends up paying. Argentina is cheap, and in dollars it is given away. “