South America

Argentina’s plan to accelerate its fiscal adjustment left some Buenos Aires-based analysts satisfied on Monday, but all eyes will be on the reopening of the US market on Tuesday to know whether the government has won back the confidence of markets.

As Argentine bonds finally found a floor last Friday, analysts said that the big adjustment in the Argentine peso may have happened. But the week of volatility drove S&P to become the first rating agency to take action on the sovereign since the turmoil began.

An unprecedented vote of confidence from the International Monetary Fund (IMF) and an unprecedented level of monetary tightening were not enough to arrest a slide in Argentine assets this week, leaving markets fearing the worst.

Undeterred by continued volatility in the region, Brazilian company Suzano Papel e Celulose will seek to break an extended hiatus in Latin American cross-border bond issuance next week. Market participants say it is the ideal credit to restart primary activity.

President Mauricio Macri’s announcement on Wednesday that Argentina had asked the IMF to bring forward some disbursements of its $50bn stand-by agreement could not arrest a slide in the peso or government debt.

Brazilian company Suzano Papel e Celulose will seek to break an extended hiatus in Latin American cross-border bond issuance next week, having enlisted a posse of 13 bookrunners to help it finance an acquisition that will turn it into the world’s leading producer of market pulp.

Banco Santander’s Chilean yesterday sold the first ever floating rate note in Chilean pesos, raising Ps75bn ($114m) in long three year notes.

Venezuela's petro seems destined to hang around like a bad smell rather than drifting into obscurity, as it deserves to. The country's president Nicolás Maduro has made it the basis of his country’s economy. It is an utter farce.

New US sanctions announcements on Russia, chatter around new IMF financing for Angola and a desperate economic recovery plan in Venezuela are keeping those emerging market portfolio managers still at their desks busy. But low volumes are playing havoc with EM secondary levels as traders embrace the quietest trading week of the summer.

Venezuela has adopted a radical approach in its attempt to rein in its out-of-control economy, effectively devaluing its currency by almost 96% and pegging the value to Venezuela’s oil-backed pseudo-cryptocurrency — widely considered a scam.

Venezuelan state oil company PDVSA saw its 8.5% 2020s drift back upwards this week after taking a hit on the back of a US court ruling that caused some concern about bondholders’ ability to claim their collateral.

Another month, another set of headlines to scare even the most resolute of EM investors. Yet it is nearly time for Latin American primary markets to make a comeback, and issuers shouldn't let their plans get derailed.