Argentina
Hobbled by recession and one of the world’s highest inflation rates, Argentina may be lurching toward the next in a series of economic crises afflicting the country over the last 70 years, Reuters reported. Consumer prices streaked more than 54 percent higher in the 12 months through March in defiance of central bank efforts to control inflation, fueling poverty and further damaging a business climate blighted by nose-bleed high borrowing rates. The peso, which lost 50.5 percent of its value against the U.S.
When investors dumped Argentine bonds en masse just as copies of Cristina Fernández de Kirchner’s autobiography Sincerely began to fly off the shelves last week, it gave new meaning to the term “bestseller,” the Financial Times reported. The asset sell-off took place as all emerging markets were suffering from the strengthening US dollar.
Argentine assets have tumbled so far, so fast that a few stout-hearted investors say it might be time to buy, Bloomberg News reported. “Find me a high-yield sovereign country with an IMF program paying so generously,” said Jean-Dominique Butikofer, the Atlanta-based head of emerging-market fixed income at Voya Investment Management, which oversees about $205 billion. “We can agree on the growth outlook, inflation running unexpectedly out of control, the debt dynamic after currency depreciation and worrying technicals.
Argentina’s assets took a beating Thursday amid President Mauricio Macri’s continuing struggle to tame rising prices and revive a shrinking economy, raising prospects that his left-wing predecessor could make a comeback in this year’s presidential election, The Wall Street Journal reported. The peso lost more than 5% of its value against the dollar in early trading Thursday, before regaining some ground in the afternoon.
Investors pummeled Argentina’s debt market on Wednesday as a looming presidential election stoked concern the country is heading for its third default in less than two decades, Bloomberg News reported. Five-year credit default swaps were quoted at 1,157 basis points, a 17 percent increase in a day, according to prices compiled by Intercontinental Exchange, Inc. That puts the probability of a default over that period at more than 58 percent, up from 22.7 percent just one year ago, Bloomberg data indicated.
For months Beto Marron faced a terrible dilemma: he could pay his rent and rapidly rising utility bills, or he could put enough food on the table for his family of four. He could not afford to do both. The decision was made for him when he was kicked out of his home on the outskirts of Buenos Aires late last year, forcing his family on to the streets. “This is sucking the life out of me.
The global economy has slowed sharply since last summer and will rely on a “precarious” boost from a few emerging markets to reverse the loss of momentum, the IMF has predicted in its latest economic forecast, the Financial Times reported. Cutting its outlook for 2019 and 2020, the fund judged that advanced economies would “continue to slow gradually” into next year while emerging economies would play a more positive role, led by an end to crisis conditions in Turkey and Argentina and stabilisation in the all-important Chinese growth rate.
Argentina’s economy sharply contracted in the fourth quarter while unemployment rose, potentially hurting President Mauricio Macri’s approval ratings as he seeks re-election later this year, Bloomberg News reported. Gross domestic product fell 6.2 percent from a year ago, the country’s statistics institute said on Thursday. It was the worst quarterly performance since 2009 after the global financial crisis, although Argentine economic data was considered unreliable until 2016. Analysts had forecast a 6.4 percent contraction.
South Africa’s AngloGold Ashanti said on Tuesday it was putting its interests in an Argentine mine up for sale as it looks to focus on operations with a longer shelf life and ability to deliver higher returns, Reuters reported. AngloGold Chief Executive Kelvin Dushnisky, Barrick Gold’s former president, was appointed to head the firm last year and has rolled out plans to streamline its portfolio, set a 15 percent hurdle on returns on investment and cut debt leverage targets to a ratio of 1.0 times net debt to adjusted Earnings before interest, tax, depreciation and amortization.