Adcap House View - Finanzas y Mercados

Adcap House View - Finanzas y Mercados

2/28/2025, 10:07:37 PM

*ADCAP SECURITIES FEBRUARY 28 CLOSING COMMENTS:* • Another weak day in terms of flow. The market recovered a bit toward the end, closing almost unchanged from yesterday’s weak levels. Once again, locals were selling, while foreigners did extremely low volume. The ARGENT 2030 traded with a $72 handle but closed at $73 bid. The ARGENT 2035s traded in the $63s. • In Bopreas, both 27C and 27D traded at $90 but remained offered at that level. • On the provincial side, BUENOS bonds are now ex-coupon, same as yesterday, but with the added noise from Milei and Kicillof’s tweet plus the decline in sovereigns, and the recent spread tightening, we also saw some selling pressure. In this context, the bid offer spread widened to more than $1 and probably some trade below with a $65 handle. At this level, bonds are yielding 15.60%. Still seeing two-way flow in Santa Fe, and corporates remain highly resilient—completely immune to Argentina’s sell-off. The market is mostly driven by retail demand, and we’re not seeing Real Money exiting at this point. • The BCS stayed relatively stable at ARS 1225 per dollar. Keep in mind that the market will be closed until Wednesday, so today was effectively a multi-day settlement. The Central Bank sold $350 million in the official market, likely due to the coupon and amortization payment of BUENOS, $364 million in total. • For peso bonds, it was a positive day with fixed-rate up an average of 0.3%, inflation-linked up 0.7% and dollar-linked up 0.1%. • Peso bonds posted strong gains despite continued moves in the dollar, suggesting a potential floor after yesterday’s sell-off, with inflation-linked bonds rebounding more sharply than fixed-rate instruments. • The fixed-rate curve saw strong gains at the short end, while the long end continued to decline, keeping the curve nearly flat and making duration extension largely indifferent. • The CER curve registered broad gains, recovering from the previous session’s sharp drop. Demand was concentrated at the short end, particularly in the March and May 2025 maturities, which rose between 0.5% and 0.7%.

Adcap House View - Finanzas y Mercados

2/26/2025, 9:12:37 PM

*ADCAP SECURITIES FEBRUARY 26 CLOSING COMMENTS:* • US equities opened strong today, the Nasdaq was up over a point by noon, but turned negative in the afternoon closing almost flat. The flight to quality into Treasuries continued with UST 10yr closing at 4.25%. • In this context, sovereigns opened 25 cents higher bouncing from yesterday's correction. However, after locals joined, bonds turned flat. The ARGENT 2030s traded between $73.70 and $73.90, and closed at $73.60. The ARGENT 2041s traded around $60, similar to yesterday, with slightly more activity but still a very quiet market. • We’ve been saying this for a while now: no news is bad news. Argentina has lost some focus, and with the daily volatility coming from US, Trump, macro uncertainty, and geopolitics, it’s not helping. Plus, the flight to quality is evident in Treasuries. • Bopreas remained very illiquid, with the 27D closing around $90.25 mid-market, but with zero activity. Same old story with provincials—selling across the board, unchanged from yesterday. BUENOS 2037s mid-market at $67.65, the less liquid ones at $59.25. Two-way flow continues in CHUBUT and Mendoza, and we’re still seeing demand for PRN, CORDOB, CHACO, and FUEGO, but very little trading overall. • On corporates, for the first or second consecutive day, we’re starting to see some investors looking to exit—not aggressively hitting bids, but rather testing the market. The rally seems to have definitively ended, and things are feeling slightly heavier. Activity was mostly in YPF with the 2031s, which were very active previously, still holding around $107, same as yesterday. Telecoms are looking a bit heavier. • The BCS remained stable at ARS 1215 per dollar and the Central Bank bought another $111 million in the official market. • As for stocks, Argentine equities today mirrored Nasdaq volatility. At one point, they were up 3% and are now flat to negative. • A neutral session for peso bonds, with fixed-rate instruments up 0.1% on average, while inflation-linked and dollar-linked bonds remained unchanged. • Peso bonds continued to trade sideways, with both the fixed-rate and CER segments maintaining the sluggish tone observed throughout the week. This is particularly due to the market's wait-and-see approach ahead of the auction results. • The session opened weak, with mixed movements across both segments. By the close, losses in the fixed-rate curve were concentrated at the long end, starting from the T13F6, while declines in the CER curve were spread across multiple maturities without a clear pattern. • The Secretary of Finance announced the auction results, awarding $4.4 trillion, resulting in a 165% rollover. Regarding cutoff rates, the S18J5 was the most impacted, though, overall, fixed-rate instruments cleared at a slight premium of approximately 0.1% effective monthly. Demand was primarily focused on the S18J5 and S31M5.

Adcap House View - Finanzas y Mercados

2/27/2025, 10:27:45 PM

*ADCAP SECURITIES FEBRUARY 27 CLOSING COMMENTS:* • Well, a black day. US Treasuries opened stable and US equity market started off strong. Nvidia reported solid sales, futures were up, and Argentina opened weaker but only 10 cents below yesterday's close. In the afternoon, Trump’s comments that tariffs will kick in on March 4 sent the Nasdaq from +1% to negative in minutes. It later recovered, but closed heavy—down 2.8%, while the S&P closed down 1.6%. • As we have been pointing out, the lack of external flow is pushing local investors to sell and today was no exception. There’s a sell-off and the "no news, bad news" environment has accelerated after Trump's comments. The market consolidated around -20 cents through midday and but the selling pressure continued in the afternoon and closed 60 cents below yesterday’s close, with some bonds down more than a point from where they traded yesterday morning. A clear example is the ARGENT 2035, which traded at $64.70 yesterday morning and hit $63.60 today, below Libra's low. There weren’t many prints, but the ARGENT 2030 closed with a $72 handle, last seen at $72.95. • On the provincial side, BUENOS traded ex-coupon today, which was expected to drop 70 cents but ended up down 1.5 points. There was some flow in Chubut and Santa Fe, and we’re still tracking demand for PRN, Chaco, FUEGO, and CORDOB. • Corporate bonds massively outperformed sovereigns—not rallying, but also not seeing any aggressive selling. Retail demand is keeping them firm, down just 10 cents at most, while sovereigns fell a full point between yesterday and today. In fact, corporates are hovering around their highs, while sovereigns have dropped roughly 3 points in recent weeks. • The BCS jumped ARS 10 to ARS 1225 per dollar while the Central Bank purchased only $23 million in the official market. • Argentine equities took a beating, with banks down 6-8% on average, and others also down over 6%. • Peso bonds had a negative day as well, with fixed-rate down by an average of 0.3%, inflation-linked down by 0.6%, and dollar-linked up by 0.2%. • The local market experienced widespread selling of peso bonds, fixed-rate, and CER, with the securities of longest duration being the most affected. This aligns with the Treasury’s recent behavior in auctions, with a focus on shortening duration. • Fixed-rate and inflation-linked bonds opened neutral, but by midday, sales picked up, especially in CER bonds, which saw more pronounced declines than fixed-rate bonds. The fixed-rate curve ranges between 2.6% and 2.3% effective monthly, while the CER curve ranges from 5% to 9.5% real yield, ordered by duration from shorter to longer.

Adcap House View - Finanzas y Mercados

2/25/2025, 10:24:50 PM

*ADCAP SECURITIES FEBRUARY 25 CLOSING COMMENTS:* • Flow was terrible today—extremely quiet, and this “summer lull” in South America keeps dragging on. Argentine bonds were among the few that didn’t catch up with the US Treasuries rally, ending in negative territory despite the long bond rallying over a point. There’s a strong flight to quality, since Trump took over volatility has surged. Today, the Nasdaq was down 1%. The UST 10yr yield closed at 4.30% and EM Bonds reached October's 3y highs. • In this context, Argentine Bonds continued under pressure and were down 30-40 cents in the afternoon to close 20 cents lower than yesterday's close after a small recovery. The ARGENT 2030 saw some flow between $73.40 and $73.60, the ARGENT 2035s between $64 and $64.45, the 2041s hit a high of $59.90 but mostly traded around $59.60. The ARGBON 2030 traded at $64.30, but overall, very little volume. • On provincials, BUENOS remains heavy with some selling around $67.65, and we haven’t seen buyers in a while. Some two-way flow in CHUBUT and PROVSF, while the BUEAIR saw demand at mid-market $100.50. The news on La Rioja staying in default after failing another coupon payment was expected. • Bopreas were weaker, with the 27D trading at $91.40 but still outperforming sovereigns. • Corporates saw a few more offers pop up, but overall, everything remains well bid. In YPF’s curve, the 2034s are still holding at $102—very resilient and stable. The 2031s 9.5% traded actively around $107, and there’s still demand in the 2026s and two-way flow in the 2027s. We also saw some trades in Vista, Tecpetrol 33, and Pampa. • Equities opened weak, especially banks, with many stocks down 5% before recovering slightly, but closing 2% down at $1874. We started seeing a rebound in both equities and bonds after the economic activity data came out in the afternoon. Solid 5.5% which Minister Caputo quickly made sure to highlight. That sparked a bit of flow, lifting prices by around 15 cents. • The BCS remained stable at ARS 1215 per dollar. The Central Bank bought another $156 million and we estimate it sold $15 million in the BCS market. • For Peso Bonds it was a neutral session, with fixed-rate and dollar-linked instruments unchanged on average, while inflation-linked bonds gained 0.2%. • Local market trading remains subdued, with a cautious tone, particularly ahead of the February inflation data. Activity was concentrated at the short end of the fixed-rate curve and the middle of the CER curve. • The session opened with gains, but by the close, the short and mid-sections of the fixed-rate curve saw declines of 0.1% to 0.4%. Meanwhile, the CER curve held its gains, with the long end rising by around 0.3%.

Adcap House View - Finanzas y Mercados

2/25/2025, 2:16:54 PM

*Transportadora de Gas del Sur (TGS): 4Q24 Earnings Preview and Model Update* See full report here: https://tinyurl.com/02252025AdcapTGS4Q24Preview TGS is set to release its 4Q24 results on Thursday, February 27th (after market close). *TGS is expected to report positive 4Q24 results*, with projected revenue of USD 330 million (+25% q/q, +46% y/y) driven by tariff adjustments and improved liquids pricing. EBITDA is forecasted at USD 190 million (+32% q/q, +211% y/y), with margins expanding to 58%. Key segments include Natural Gas Transportation with revenue stabilizing at USD 133 million, Liquids rebounding to 280 ktn with prices up 25% y/y, and Midstream revenue estimated at USD 56 million. For the full year, EBITDA is expected to reach USD 1,138 million (+19% y/y). We have updated our model with improved liquids prices and transportation tariffs, while also reducing country risk and adjusting the WACC for a more normalized scenario in Argentina for 2025. *Discussions are ongoing regarding the RQT, GPNK extension, and Liquids project*. Discussions on the RQT are ongoing, with impact depending on the adjustment mechanism and Regulatory Asset Base. TGS expects to maintain USD 300 million quarterly EBITDA from transportation. The tender for the GPNK extension, managed by ENARSA, is still pending. The Liquids project is in data collection and an FID expected in 2H25.

Adcap House View - Finanzas y Mercados

2/25/2025, 2:01:19 PM

*Metrogas (METR): 4Q24 Earnings Preview* See full report here: https://tinyurl.com/02252025AdcapMETR4Q24Preview Metrogas is set to release its 4Q24 results on March 6th (after market close). *Revenue stability in 2024 was driven by earlier tariff adjustments and inflation-linked increases since August, laying a strong foundation for 2025. The company is expected to report stable 4Q24 results,* supported by tariff increases despite rising inflation-driven costs. For 2025, free cash flow is projected to remain sustainable, ensuring liquidity for operations and debt refinancing, though dividend payments are currently restricted due to existing debt obligations. *Trading at 4.8x 25E EV/EBITDA*, Metrogas appears slightly undervalued within the gas distribution sector, particularly given its strong liquidity, though limited upside remains compared to regional peers trading at 6.3x. Regulatory risks, especially around the ongoing Comprehensive Tariff Review (RQT), remain a key uncertainty. EBITDA is expected to grow from US$180 million in 2024 to US$220 million in 2025, driven by the full-year impact of tariff adjustments and RQT increases. While the company faces regulatory and refinancing risks, recent measures—like tariff hikes, bank debt refinancing, and positive debt issuance precedents—have mitigated some concerns. Metrogas plans to resolve USD 183 million in working capital liabilities and is exploring new peso-denominated debt to ease financial constraints, which could allow dividend payments to resume for the first time since 2001.

Adcap House View - Finanzas y Mercados

2/18/2025, 10:08:35 PM

*ADCAP SECURITIES FEBRUARY 18 CLOSING COMMENTS:* • Today wasn’t as bad as expected. Many ADRs ended positive, while others closed slightly negative after yesterday’s sharp drop in the local peso market with very low liquidity. We expected ADRs to continue that trend, but that didn’t happen. The BCS confirmed the ARS 20 jump from ARS 1,197 on Friday to ARS 1215 where it closed today. The Central Bank bought $171 million in the official market. • In the bond market, the lowest prices were seen early in the morning, with no bids coming in. The ARGENT 2030 traded at $73.65, the 2035 at $64.65, and by the end of the day, the ARGENT 2035 recovered half a point while the 2030 gained a bit more, last traded around $74.35. On Friday, the last trade was at $74.85, so overall, we’re down 60 cents. Not a huge deal. Volume was low, not many questions, and there’s a general consensus that this was a misstep, though its real impact will be seen over the medium term. • For Provincials, BUENOS closed at $69.80 on Friday, traded down to $69.00 and ended more offered at $68.50, nearly doubling the impact on Sovereign Bonds, after being outperforming sin early January. The second-tier names still have demand but aren’t really trading. • Corporates opened with lower bids but ended mostly unchanged. The last YPF 2034 trade on Friday was at $102.00, and today it closed between $101.70 and $102.10. Some demand for the 2031s, some supply in the 2033s. Telecom 2031, which had seen two-way flow on Friday around $105-$105.20, closed around those levels again. TRAGAS saw stronger bids, closing at $106.15 mid-market, outperforming the corporate curve. Worth noting that corporates held up well despite the massive selloff in Treasuries. The 30-year Treasury dropped more than a point, and the 10-year, fell over half a point. Still, most corporates remained unchanged, separate from the Argentina noise. • As for stocks, despite lingering concerns from the crypto scandal, investors still seem to favor Argentine equities. The session opened with high volatility, but after the first hour, many Argentine ADRs moved into positive territory. The overall performance so far is significantly better than what many analysts had anticipated. The Merval surged 6.1%, closing at $1,977. The biggest gainers of the day were Grupo Financiero Galicia (GGAL) +9.32%, Transportadora de Gas del Sur (TGSU2) +9.23%, Telecom Argentina (TECO2) +9.14%, and Loma Negra (LOMA) +8.77%, reflecting strong buying interest across various sectors. Adecoagro (AGRO) surged more than 12% after news broke that Tether Investments made an unsolicited offer to acquire a 51% controlling stake in Adecoagro at $12.41 per share, representing a 29% premium over its current price. The offer values the company at $1.975 billion, with Tether already holding 19.4% of Adecoagro’s shares. The proposal was made through a tender offer, following a Schedule 13D disclosure on November 14, 2024. Meanwhile, we observed sellers in Banks and Oil & Gas, likely driven by speculative fund trading in Argentine assets • Peso bonds had a positive session, with fixed-rate instruments rising 0.3% on average, inflation-linked bonds up 0.1%, and dollar-linked bonds gaining 0.2%. • Fixed-rate bonds erased yesterday’s losses, with notable strength at the long end of the curve. Dual bonds, particularly TAMAR and T15E7, stood out in performance and activity. The market appears to be gradually warming to longer-duration securities, given that the fully flat curve offers little incentive to shorten duration. • Inflation-linked bonds had a generally positive session, though individual securities showed mixed movements. The TZXY5 dropped 0.4%, while the TZX25 gained 0.5%. Trading volume was solid, with flows concentrated in 2026 maturities. • Dollar-linked bonds continued to attract interest, with activity levels elevated relative to typical volumes. Trading was focused on the TZV25, which edged up 0.2%. Notably, the peso-denominated synthetic of the TZV25 is yielding 4 percentage points more in nominal annual terms than its corresponding LECAP.

Adcap House View - Finanzas y Mercados

2/19/2025, 9:57:50 PM

*ADCAP SECURITIES FEBRUARY 19 CLOSING COMMENTS:* • Sovereign Bonds opened 25 cents lower, and extended losses to 50 cents by noon. In the afternoon, some buyers appeared and attempted a recovery but ultimately closed down by an average of 50 cents. For reference, yesterday we mentioned the last trade in ARGENT 2030 was at $74.35, while today multiple trades occurred around $73.75, 60 cents lower. The ARGENT 2035 ended $64.4, and we saw significant activity in ARGENT 2041 around $60.30. Some relative value trades took place in 2030/2041 and 2030/2035 pairs, but overall, the market remained weak into the close. • Boprea saw no activity. In provincial bonds, prices remained stable. BUENOS ended unchanged at $68-$68.5, with some trades occurring between $68.25 and $68.40. We noted offers in PROVSF and demand for CHUBUT 2030, while buyers remained engaged in CHACO, PRN, and CORDOB. • On the corporate side, YPFDAR 2034 traded between $101.80 and $102, essentially unchanged. The 9.5% 2031s, which saw demand yesterday, traded at $106.80, while the 8.75% 2031s—historically 50bps above the 9.5%—traded at $104.75. Beyond that, we observed demand in TECOAR 2031, TRAGAS 2031, and YPFLUZ 2032, with notable stability across the corporate space. It wouldn’t be surprising if retail accounts have been rotating out of sovereigns over the past few weeks, moving into corporates—leaving some yield on the table but feeling more comfortable in terms of risk, consistently favoring strong names. • The BCS was under pressure again and closed at ARS 1218 per dollar, slightly higher than yesterday after some intervention that we estimate at $39 million. The Central Bank purchased $147 million in the official market. • As for stocks, the Merval index closed up 0.41%, finishing at $1,967. The correction in this market continues to fade, as some recent polls indicate that Milei's support remains steady. The biggest movers of the day were Telecom Argentina (TECO2) +5.82%, Metrogas (METR) +2.03%, and Transener (TRAN) +1.81%, with TECO2 continuing its rally after gaining 9.14% yesterday, driven by news of Telefónica selling its operations in Argentina, Uruguay, and Colombia. On the downside, BYMA fell 0.68%, Central Puerto (CEPU) dropped 0.92%, and Transportadora de Gas del Sur (TGSU2) declined 1.63%, showing some weakness in utilities and financials. • For Peso Bonds it was a neutral session, with fixed-rate instruments down 0.1% on average, inflation-linked bonds unchanged, and dollar-linked bonds up 0.2%. • Both the fixed-rate and inflation-linked curves had a weak session. They initially posted slight gains before reversing later in the day. The moves in the dollar likely contributed to uncertainty among peso bondholders. Losses in fixed-rate bonds were concentrated at the long end, while in the inflation-linked curve, declines were focused on 2025 maturities. • Dollar-linked bonds continued to see elevated activity, though concentrated exclusively in the TZV25, which gained 0.2%. The strong volume and demand for the TZV25 may be linked to arbitrage opportunities, as its peso-denominated synthetics offer a higher yield than the corresponding LECAP.

Adcap House View - Finanzas y Mercados

2/18/2025, 7:52:06 PM

*Transportadora de Gas del Norte (TGNO4): 4Q24 Earnings Preview, 2025 Outlook and RQT Talks* See full report here: https://tinyurl.com/02182025AdcapTGN4Q24Preview *TGN’s revenue stability in 2024 was driven by a 675% tariff increase in April and inflation-linked adjustments since August, setting a solid base for 2025.* The upcoming RQT could boost EBITDA by 10-15%, mainly from regulated transportation revenues, as it balances supply and demand following the Northern Pipeline reversal. *We estimate a 2025 EBITDA of USD 248 million,* supported by the full-year impact of tariff adjustments, the Integral Tariff Revision (+10%), and potential off-season export growth (+10%). *TGN trades at 5.0x 25E EV/EBITDA*, with EBITDA levels nearing historical peaks from 2017-2018. Further upside relies on export growth, execution of strategic projects, and dividend distributions. *4Q24 performance is expected to remain stable, driven by tariff hikes but impacted by inflation and year-end expenses.* In 2025, dividend payouts will depend on project funding (e.g., Vicuñas, pipeline expansions) and debt financing. With negative net debt and flexible capital management, TGN is well-positioned to balance shareholder returns with growth initiatives.

Adcap House View - Finanzas y Mercados

2/19/2025, 10:42:40 PM

*Vista Energy (VIST): 4Q24 Earnings Preview and Model Update* See full report here: https://tinyurl.com/02192025AdcapVIST4Q24Preview We maintain our *BUY* recommendation and *target price of USD 84.00/ADR* for VIST and incorporate model updates reflecting our 4Q24 Preview. *Our revised estimates for 4Q24 reflect a more conservative quarter compared to our previous projections, with EBITDA expected at USD 268 million*—20% below prior projections—*due to higher cash costs and one-off impacts* (increased trucking costs and inventory build-up needs). Total production rose 17% q/q and 51% y/y to 85.3 kboe/d but came in ~5% below previous estimates, driven by a 6% shortfall in crude oil output, partially offset by stronger natural gas volumes (+4%). Elevated trucking costs, due to delays in Oldelval’s Duplicar pipeline expansion, and the pipeline fill led to a combined shortfall of USD 40–50 million. COGS rose 5% from increased trucking reliance, while lifting costs also saw slight pressure from peso appreciation. We revised Capex down to USD 330 million (from USD 350 million) and expect lower evacuation costs in 1Q25 as Duplicar comes online. *On the corporate side, Vista raised USD 750 million through two bond issuances*, strengthening liquidity to cover near-term obligations and support its ambitious 2025 Capex plan (~USD 1.25 billion), including participation in Vaca Muerta Sur (VMOS).