10/20/2020 - Economy and Finance

A new exchange, a new possibility

By guido lanzillotta

A new exchange, a new possibility

The debt agreement between the government and the creditors that has recently become known implies much more than the new value that will have the new Argentine obligations as they begin to quote in the secondary market. In any case, it would be worth a punctual article such an analysis, and it is fundamental to be able to interpret it for an integral look.

The aim is to focus on how important it is for a country and its development, to make it clear how through the country risk and the tools that the capital market offers us, to be able to efficiently move the years ahead.

Argentina brings with it an economic and political history, which shows us why society, in large part, is reopened to the capital market. Its continuous cycles of exits and entrances to different economic crises, and the lack of unity in public policies build a conjunctural mistrust that rebounds in investors negatively. This is very causal, making it impossible to develop efficient tools through the capital market that can be useful to companies, investors and governments.

The priorities of Argentina as a country are quite. And the emergencies we have even more. Not to mention whether we are in a pandemic context. But we must have (those who believe in the positive role of the capital market) the insistence of putting ideas and solutions that can contribute in the medium and long term.

Although there is still a lack of negotiation with the IMF, we can move forward with the need to clarify the fiscal ground for the future. It is the structural factor that will actually allow to lower the country risk, or at least keep it with a downward trend.

In a world of excessive liquidity and low rates; and punctually in Argentina, a high emission we should not lose sight of the virtuous circle that we can generate after this exchange of debt capturing the external and internal flows in shareholders instruments.

Knowing that they will be in the portfolio of the sustainable guarantee fund and the BCRA a considerable amount of Argentine bonds can invite us to believe that the state can be part of it and not only to show firepower and to repercussion on the exchange expectations of the bag and ccl dollar (something that is sometimes necessary but it is no longer short-term ata) but also to further with more emphasis the use of public bonds as working tools.

The obvious question is that I would like to receive a debt title with such bad antecedents, tied to a change of permanent game rules. That is where tax benefits, indebtedness for private projects through these obligations and their use as a means of payment in state and private archaees should be ideas that should not be carried out.

Understanding that the debt with counterparts is not bad, that the state must promote debt as an investment and self-financing mechanism, and that both institutional and individual investors can resort to it (to make their taxes more efficient, private debt and savings more efficient) has to be a premise that to fulfill generating positive virtuous circles in favor of Argentina.

If private companies award their employees with shares of the same company: Why can't we think that executive, legislative and judicial power can through scales do it with its employees? Why can't we invite companies and investors without importing their size to have predefined government scales (which do not harm the state's or private annual budget) so they can choose to pay taxes or replace Argentine bonds with the condition that they are holding until the end of their life? Why can't we think of mixed financing mechanisms for the PyMEs where banks deliver part of money and part of bonds for them to use guarantee and finance cheaply through stocks, respecting the necessary quotas? It's just a few questions I ask and I invite you to think out loud.

The demand for Argentine bonds and its alternative to use in different areas and as a counterpart for different purposes we see that it can generate a positive impact on the following financial aspects: greater exchange stability, greater absorption of weights that do not necessarily end its conversion to the mep dollar or counted with liqui, greater access to finance large and medium-sized enterprises, greater fiscal discipline and by ende greater collection, greater funding resources for the state, not only dependence of an international debt market

In turn, we see that, as a counterpart, an effect will be erupted at the level of society: there will be an implicit social pact for all social actors to have a greater or lesser extent these securities (common objective), there will be a greater culture of expenditure and savings and the focus of attention on political emergencies with a more financing alternative (following the discussion of debt to us with monetary or external debt).

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guido lanzillotta

guido lanzillotta

I got from Lic. Business Administration at the UCA. In parallel he holds a diploma in the capital market in ECEMA and executive finance programs at the Argentine Capital Market Institute (IAMC).
Currently I am Executive Director of Assur Capital, a company with own investments in the stock market, also dedicated to providing consulting and financial services to individuals and legal entities.
I previously held administrative and managerial positions in areas of back office, treasury and operating table of the company for more than 10 years.
In 2020, I led the list for the Ordinary General Assembly of the Buenos Aires Trade Exchange as a candidate for First Supplementary Counselor, currently being Director and Coordinator of the Youth Exchange and its representation in the J6 (group of young members of the G6 cameras).

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