The crisis in Argentina puts in game 5.800 billion in Spanish investment

Macri announces a package of socks the economy to curb the impact of the devaluaciónLa defeat of Macri in Argentina slows the bags of Spain and EuropaEl argenti

The crisis in Argentina puts in game 5.800 billion in Spanish investment
Macri announces a package of socks the economy to curb the impact of the devaluaciónLa defeat of Macri in Argentina slows the bags of Spain and EuropaEl argentine peso plummets following the defeat of Macri in the primary

The tango is a dance complex often say those who know something of this. Also what is the current situation of the economy of Argentina: From the last year is under the strict surveillance of the International Monetary Fund (IMF), with which it has signed a bailout of 57.000 million dollars to avoid the bankruptcy of the country. An agency that predicts a fall in GDP of 1.3% this year, to grow a mere 1.1% in 2020. All this, rounded off with a inflation that, even though you are surging, has gone from 4.7% in march to 2.7% in June this year and a few financial markets, which discount new turbulence : the main Stock index in argentina the "S&P-Merval Index," appeared in the Monday, a fall of 48% - measured in dollars - that passed, according to estimates of Bloomberg, for being the third largest draught in 70 years, worldwide.

Since then, the selective argentine has been recovering part of what was lost, with an important devaluation of the peso of over 17% just this Monday, and almost 5% the next day, going to exchange the u.s. currency to more than 55 pesos compared to the 40 pesos to the dollar from the beginning of the year. In the case of the euro, this was exchanged to 62 pesos versus 42 pesos of January.

Spain: second largest investor in Argentina

The Spanish companies have an important role in the country that presides over Mauricio Macri from 2015: we are the second foreign investor with 13.169 million dollars after the united States (16.993 million), according to the latest estimates of the Central Bank of the Republic of Argentina to 31 December 2016. In particular, estimate from the Secretary of State for Trade, Spain is the first foreign investor in activities such as financial services and real estate, the supply of electricity or in administrative activities.

This same body estimates that the Spanish export to Argentina amounted to a total of 1.192 million euros in 2018, a -7,4% less compared to the previous year (1.287 million). For its part, imports from Argentina were around usd 1.780 billion euros, an increase of 14.1% in 2017 (1.559 million). Spain is the ninth customer of Argentina and the second within the European Union.

BBVA and Santander, the most exposed

The financial sector is one of the most vulnerable: the Spanish banks have the largest exposure to Argentina at the global level, 52 per cent, according to the Bank of International settlements (BIS), which is estimated at 22.083 million dollars (19.695 million euros). A year ago, that percentage was 55.4 per cent. As says Alberto Blanco, professor of the Master in Stock exchange and Financial Markets of the IEB (Instituto de Estudios Bursátiles) "behind it would be the u.s. with an exposure of less than half, of something less than 8,500 million dollars." Since the consultant Lombard Odier, your macro strategist Stéphanie de Torquat, has pointed out that "the probability of a default (bankruptcy) of sovereign debt in Argentina has increased significantly," and maintained its negative position on the future of the country.

Such would be the example of BBVA , also listed on the Stock exchange of Buenos Aires through "BBVA Banco Francés", and the titles fell on Monday, a 47,17%. In particular, the 5.3% of the results of the Spanish bank have their origin in Argentina, but by the impact of the hyperinflation has discounted has discounted the results attributed to the first half of the year 94 million euros, being these in 110 million. A similar case is that of the Banco Santander , where 5% of their income born in argentine soil. In this regard, the analyst XTB Joaquin Robles has commented that the Spanish bank is "one of the leaders in the credit volume of the country ". Between January and June of this year these have increased by 14% up to about 6,000 million euros, as reported by the bank in the presentation of the results of the first half of 2019. In this period, the ordinary profit was 73 million euros.

however, the president of the Financial Commission of the General Council of Economists Antonio Pedraza, regretted that "the Spanish companies do not have a lot of connection with emerging markets very powerful as those of the Far East". In this sense, she highlights "the public accounts more sound" of some of these countries and warns against the depreciation of currencies in places like Argentina. What has reminded us that it could impact on the interest depending on the currency in which it is stipulated the repatriation of profits. Especially, if it is in dollars.

Hyperinflation and devaluation

The high inflation and strong devaluation of the peso during the last few months have weighed on the results of other Spanish companies with a significant presence in the Latin american country. Such is the case of Telephone whose exposure is estimated to be 4.7% and that, in Argentina, achieved revenues of 2.315 billion euros in 2018, 26.2% the previous year. Just in the last year, by the impact of hyperinflation, signed from the Spanish multinational to an impact of 317 million euros on the turnover. "During the last few months it has already been discussed a divestment in the country with the objective to continue to reduce debt and the risk currency," he warned Robles (XTB).

you should Also mention companies such as Day , which has the country's 979 stores and employs about 4,500 people. Argentina represents 13% of their income, which have also been impacted by the strong increase of prices at the margin of the complex situation of this company. What the teaches was estimated in a decrease of the net sales of 94,3 million euros to 971 million during 2018, a 30.3 per cent less including the depreciation of the argentine peso. For its part, the Spanish Codere - the gaming industry - has in the Latin american country its second-largest market. As has happened to other firms, operating earnings have been impacted by the strong devaluation of the peso during the last year: 174,7 million euros, 30% less than 2017, leaving this figure at the global level in 1.476,4 million, 9.9% less. Also relevant is the position of companies as Mapfre offers in the country, home insurance and car, as well as other brands such as Naturgy, Indra, ACS, Acciona, Elecnor and Inditex .

Date Of Update: 18 August 2019, 13:13

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