The president of the National Securities Commission (CNV), Sebastián Negri, remarked that from December 2019 to the present, the assets managed by investment funds went from $800,000 million to $5.5 billions, and highlighted that “Argentina financed pandemic expenses” with resources from the capital market.
“It multiplied almost sevenfold. It is a growing capital market in pesos that allowed the Treasury to be financed for everything that was required during the pandemic. Argentina financed the pandemic expenses in the capital market, in an important part,” Negri pointed out.
The head of the CNV stressed that “it is an initiative of the Government that the capital market finance public works,” and pointed out that it could “finance infrastructure that connects (the Neuquén hydrocarbon deposit) Vaca Muerta with the internal and external market as well.”
The following are the main sections of Negri’s interview with this agency:
How is the post-pandemic capital market?
-It is a market that worked during the pandemic, it did not stop. When the Government took office in December 2019, the assets managed by the investment funds were approximately $800,000 million and today it is $5.5 trillion. It multiplied by almost seven times. This gives the idea that it is a growing capital market and in pesos that allowed the Treasury to be financed for everything that was required during the pandemic. Argentina financed the expenses of the pandemic in the capital market, in an important part.
Why did this exponential growth occur?
-The creation and strengthening of some instruments allowed companies to have investment alternatives ranging from money market funds (liquidity) to funds with instruments linked to inflation. Not only the volume of the market grew, but also the number of companies that put their money. In the last two months, Argentine stocks have risen above the international standard. They were obviously at very low price levels, but they grew quite a bit. That is a good sign in the midst of an international market that is going against the grain due to recession fears.
How are you seeing what is related to the operation with the stock market dollars?
-It is a two-way market, where there is demand but also supply of dollars. In times of greatest uncertainty and stress, we try to avoid price distortions. As happened when Economy Minister Martín Guzmán resigned, when there was a peak of uncertainty that produced an overreaction. The idea is that it works as a transparent market and is an alternative for people who have to access dollars and pesos. To the extent that uncertainty decreases, this market is going to calm down and shorten the gap with respect to the official dollar.
“More and more SMEs throughout the country are financed in the capital market”
The president of the National Securities Commission pointed out that it is a situation that occurs “throughout the country.”
“There are more and more SMEs throughout the country that are financed in the capital market via instruments such as the deferred payment check, but also through negotiable obligations, which is a very useful instrument for SMEs and allows them to finance themselves at a very good interest rate below bank cost,” Sebastián Negri told Télam.
He stressed that financial assistance to this segment “is a policy that is growing, there are more and more SMEs that take advantage of it”, although he pointed out that “there is a teaching task to be carried out throughout the country so that this type of instrument is increasingly popular and more widely used.
“It is a very effective measure that finances working capital. The SMEs that take advantage of it are mostly industrial, agricultural and that provide services. It is a great State policy, an alternative for SMEs that has given good results,” Negri stressed.
In addition, he stressed that with the Secretary of Industry, José Ignacio de Mendiguren, “a work plan was agreed to bring greater knowledge and training to SMEs in particular, but also to intermediaries, such as chambers and production secretaries of the provinces. “.
What possibilities does the market offer for those who adhere to whitewashing for construction?
-The funds that enter the laundering can access the MEP dollar as an alternative to encourage it. The whitening will have a significant volume. There is a term that was given in this opportunity, which is longer than the one that worked last year. Everything is set so that, if the macroeconomic conditions stabilize, as we are seeing, it will have an important result, because it is already happening, there is already a significant volume of private work and this can promote and maintain these record levels of employment in the construction sector.
And with public works?
-It is an initiative of the Government that the capital market finances through trusts and other instruments a part of the public works that Argentina needs. That it be an alternative, for example, to finance works that connect Vaca Muerta with the internal and external market as well. The capital market can provide an alternative to this financing. There are resources available for productive investment, particularly for this challenge, which is to connect Vaca Muerta with the national backbone network and abroad, to be able to export. There are different common investment funds to finance infrastructure, but other options are also being evaluated. Our mission, in addition to protecting the investor, is to channel savings towards productive investment
What expectations are there for the new simplified regime for the issuance of bonds with social impact?
-There have already been some positive experiences of the NGOs Techo and Sumatoria, with the collaboration of market sectors that did not charge. There is more demand for third sector entities in general that have a social impact and that could be financed, perhaps for low amounts. It is a long way to go and we wanted there to be a specific regulation that gives specific conditions and characteristics of the morphology of this sector, which will promote this and allow philanthropy to be channeled through here. It is a more transparent alternative than others. It is to provide one more alternative to a sector that has activities with a social impact with low amounts that do not generate any type of risk. The idea is to multiply this.
