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Sunday, December 4, 2022

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Investors return to Peru before recovery of the sun

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Investors who chose to distance themselves from Peru in the face of political turmoil aggravated by the arrival of peter castle to the Government – ​​as the icing on the cake after the tensions generated by the presidential scandals since 2020 – have once again viewed our market with enthusiasm thanks to the fact that we have the fastest and most solid economic growth in the region and for the highest interest rates that will promote the recovery of the sun, highlighted Bloomberg.

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The agency underlines that the Peruvian currency has risen 3.7% so far in January and raised its recovery from its record low of September 30 to 7.2%.

He also recalled that local stocks also outperform most countries of the same size, accumulating an increase of 11% together with short-term national bonds while the Central Reserve Bank of Peru (BCRP) controls inflationary risks by raising reference interest rates.

Brendan Mckenna, Wells Fargo strategist in New York, told Bloomberg that “as long as Castillo’s comment doesn’t affect confidence for the time being, the sun’s run should not be interrupted by political noise.”

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Along these lines, he argues that calm has been generalized since the beginning of December, when the Congress rejected a motion to initiate an impeachment process against President Castillo.

In addition, Eduardo Jimenez of Macroconsult emphasized that Peru’s economic fundamentals are good and justify the appreciation of the currency. “To the extent that the Government renounces severe changes in the economic system, the sun will continue its fundamentals,” he said, in addition to estimating that the sun will strengthen to S / 3.8 per dollar by the end of the year.

However, Bank of America economist Alexander Muller considers that “If more evidence appears that incriminates Castillo, we believe that this would move the markets,” therefore, expecting political stability in Peru could be a risky bet, since disputes between Congress and the Executive.

Finally, Bloomberg stresses that investors will continue to pay attention to changes in the cabinet chaired by Mirtha Vásquez, citing as an example the rumors about a replacement for Pedro Francke (MEF).

“Political noise may return, but the bar is higher when it comes to damaging the sun,” sentenced Alejandro Cuadrado, head of foreign exchange strategy for Latin America Banco Bilbao Vizcaya Argentaria SA in New York.

Dollar continues to fall

The dollar closed the week down and stood at S/ 3,835, a figure not seen since May 2021 (9 months ago). In this way, the North American currency depreciated by 0.05% compared to the close of Thursday (S / 3.8370) and accumulates a loss of 3.91% against the sun so far in 2022.

The BCRP intervened by placing currency repos for a term of 2 weeks for S/ 200 million.

BVL accumulates growth of 8.68%

For its part, the Lima Stock Exchange (BVL) closed with the S&P Peru General at -1.64% (22,944.88 integers) and accumulates 8.68% so far in 2022; while the S&P Peru Select fell -1.95% (613.43 units).

According to Renta4 SAB, the local stock market fell 2.31% in the week, due to the fall of Cerro Verde (-7.37%), Credicorp (-5,61%) e InRetail (-3,01%).


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