Credit Suisse Recommends Shifting Into Bonds From Argentina
Source: Wall Street Journal
BUENOS AIRES (Dow Jones)--Credit Suisse Group (CS) recommended to its clients Tuesday that they consider buying more Argentine bonds.
Credit Suisse said the market has "over-played its concerns" about recent developments in Argentina regarding the use of central bank reserves to pay debt this year..
"The government seems to be going out of its way to make sure it will have access to funding for debt service during the remainder of the year," Credit Suisse said in a report.
Even so, the report noted that "the political climate in Argentina remains tense."
Having lost control of both chambers in Congress, the government has been weakened politically and likely will face increasing resistance from opposition parties.
Credit Suisse recommended that investors stick with dollar-denominated debt given that potential weakness in peso-denominated assets and the threat of inflation.
"The main exception is GDP warrants, which we like (given our forecasts for Argentine GDP growth), although they are claims that are roughly linked to the performance of nominal GDP in peso terms," the report said.
-By Taos Turner, Dow Jones Newswires; 5411-4103-6728; email@example.com
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