According to the government, much of the explanation for the local capital market at the beginning of the year is explained by the proximity of such a development. As this paper has been erected last week, the government's economic and financial spheres ensure that January 2019 begins to reach the country's "second-generation investors"; distinguishing them from the gamblers who arrived in the country during the first two years of Mauriceio Macri's rule and who never believed (later it was shown) that the government's program could be maintained in the long run. Those who first left the local market in April 2018 were also expelled by the government before the imposition of the tax on financial income that began to apply this month to non-residents.
By contrast, foreign investors who will arrive from the beginning of 2019 will have a more optimistic interpretation of the progress of the Argentine economy, and will agree with the ruling party that the future is better of the present. Or, following the peak that Miguel Angel Broda discovered yesterday, "before we were good, but we were bad, we're bad now, but we're doing well."
The strategy of investors who have already arrived in the country changed their dollars (strengthening the supply of foreign currency and strengthening the exchange rate) and positioning themselves in company assets and public titles would be to anticipate the change in the prospects of the application. more effective than the "emerging" cow in May. They took note of the fact that after the financial storm in 2018 the assessment of local companies and Argentine bonds had been tsunami in their quotation and in many cases they were offered at the end of 2018 almost 50% of their value in dollars compared with January last year. In other words, they would have bought cheap before the revaluation that the capital market should have since May.
When the "emergent" qualification is confirmed and the country can eventually receive investments that it believes will be between $ 3,000 and $ 6,000 million (according to the analyst who calculates it), these actions and titles will have been passed on enough to ensure significant profits. Then they will assess whether they will stay or leave the local market.
Argentina received the news to improve MSCI's qualification on June 20 last year, in the midst of the financial and economic crisis of 2018, which virtually could not enjoy the novelty. At that time, MSCI explained that the decision is based on the fact that international investors have expressed confidence in the country's ability to maintain the conditions for access to the stock market, a key rating factor. It was also clarified from June 2018 to May 2019 that the rating agency will closely follow the ratification of the decision and change it (the return of the border qualification) if Argentina applies some kind of restriction to the markets both for entry and especially to leave.
As the government did not progress, even in the worst moments of the crisis, it is not considered that the emergence of "emerging" will delay arriving. According to market estimates, the Argentine market will have a weight in the MSCI index of about 0.5%, similar to that in Colombia. This would mean a potential demand for local papers between $ 3,000 and $ 6,000 million. The calculation starts from managing the funds that could acquire Argentine securities (so far only the ADR listed on Wall Street). Portfolio designers are supposed to stick to a benchmark (the 0.5% benchmark), but we will have to wait until May (the date of the overall rebalancing of the index) to confirm the forecast.
Argentina has been a "border" market since 2009, when MSCI dropped out of the country as "a result of the continuing restrictions on entering and exiting stock market capital in Argentina," according to the consultant's explanation. The remark is preserved in the rest of the administration of Cristina de Kirchner, and after the arrival of Mauricio Macri the improvement is sought. It would mean that in May the good news will become official.