Goldman also supports dollar bonds under the Milei Government

Vinicius Andrade and Kevin Simauchi

Today 19:37

It is likely that the debt in Argentina’s difficulties continue to recover as the new Administration of President Javier Milei takes its first steps toward tax reform, according to Goldman Sachs Group Inc.

The bank toadded the country’s sovereign bonds to its basket of preferred loans in emerging markets distress. The strategists Kamakshya Trivedi and Nathan Fabius They say the bonds offer significant upside potential.

“The risks of implementing political reforms are higher than in most places, and “The bar is high for successful macroeconomic stabilization.”, they wrote in a note on Thursday. “But we believe that the new Administration’s initial steps are constructive and that the market is likely to reward them on a tactical horizon.”

Javier Milei prepares a decree to deregulate the economy

Goldman joins a host of Wall Street firms, including Citigroup Inc., Barclays and Bank of America Corp., which recommend investors buy Argentine bonds under the new presidency of Milei. The bank’s model points to a recovery value of around 45 cents (assuming the peso weakens to around 2,250 per dollar over the next year), well above current levels. He also said the International Monetary Fund may be willing to extend the maturity profile of its loans to help the new government.

Bond Performance

Reference dollar bonds with maturities in 2035 rose on Thursday, adding as much as 0.4 cents on the dollar to continue trading at its highest levels in two years, according to indicative price data compiled by Bloomberg.

The IMF issued a statement shortly after the presentation of the economic measures by the Minister of Finance, Luis Caputoin which he said that it was about “bold initial actions” and added that its implementation should help stabilize the South American economy.

L.M.

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