Reports

Transener 2Q 19

Transener (TRAN): Political turmoil leads to an opportunity

Enel Generación Costanera 2Q19

Enel Generación Costanera (CECO2): Huge potential, higher risks

Central Puerto 2Q 19

Central Puerto (CEPU): Despite the sharp drop, uncertainty remains. Market Performer

Loma Negra 2Q19

Loma Negra: A lower cement demand and expectations of less investment in public works affect results.

Argentina Equity Market

Following Lecaps and Letes maturities extensions, and FX controls, domestic securities slumped reflecting significantly weaker economic conditions. We suggest eliminating exposure to argentine banks and utility companies’ stocks, due to higher regulatory risk and possible tariff freezing.

International Macroeconomic Perspectives

• US: GDP growth was driven by consumption during 2Q as investment fell for the first time in three years<

Argentina Macroeconomic Perspectives

The government placed new FX regulations aiming to preserve international reserves amid a confidence crisis due to political uncertainty

Argentina Fixed Income Market

After the Government’s disclosure about Argentine bonds maturities extension plan, we estimate that the final project would be more aggressive than the original one. This scenario would imply in potential principal and or coupons haircuts, of capitalized coupons, such as Discount bonds. We suggest to eliminate all exposure to Argentine securities.

Argentine Banking Sector 1H 2019

1. The banking industry maintains record-high earnings, but with Leliq dependence 2. The financial intermediation business continued to lose weight; securities income saved the year 3. Private-sector credit grew below inflation, with a material increment in NPL 4. The efficiency ratio worsens

Banco Hipotecario 2Q19

Banco Hipotecario’s (BYMA:BHIP) 2Q 2019 result confirmed a declining profitability trend and lower activity, initiated in previous quarters. Although the period’s net income (ARS 616 million) lies above 1Q19 figures (ARS 36.5 million), it is only 20% higher than the profit obtained in 2Q18, well below the annual inflation rate.

BBVA Argentina 2Q19

BBVA Argentina (BYMA/NYSE:BMA) posted a net gain of ARS 6.8 billion in 2Q19, almost 220% higher y-o-y, and 13% q-o-q. It is worth recalling that the net income of 1Q19 included a one-off profit from the sale of 51% of the bank’s stake in Prisma and the market valuation of the remaining 49%; excluding such impact, the growth in the quarter would have been 74%.

International Macroeconomic Perspectives

US: Fed sees a strong economy but rising uncertainty and paves the way for another rate cut.

Argentina Macroeconomic Perspectives

Argentina: Following primary elections, the economic outlook made a significant turn

Argentina Equity Market

Uncertainty regarding Alberto Fernandez’s possible economic actions, mainly about the relationship with the IMF continues, following his statements after his meeting with the IMF’s representatives. Even so, we believe that, at current prices, certain stocks trade at attractive entry points. Although, we suggest eliminating exposure to utilities, due to higher regulatory risk and possible tariff freezing. Companies with a high percentage of dollar denominated revenues, lower operating exposure to domestic market and low debt levels would act as a hedge in the current scenario.

Banco Supervielle 2Q 2019

Grupo Supervielle (BYMA:SUPV) posted mixed results in 2Q 2019. Earnings amounted to ARS 1.9 billion, +302% y-o-y, and 210% q-o-q. It is worth noticing that 2Q19 results include ARS 664 million in inflation adjustment driven by the income tax provision, which translated into a negative effective tax rate, augmenting the quarter’s net income.