Global markets crashed today on what economists are declaring ‘Black Monday,’ as the impact of the Covid-19 virus begins to be felt across the globe. The Buenos Aires Stock Exchange was no exception – it fell more than nine percent amid coronavirus fears and plummeting oil prices.
An hour after opening, 88 shares traded down, and just two on the rise and two others stable.
Meanwhile, Argentina's country risk index, tracked by JP Morgan, soared to over 2,700 points – its highest level since 2005.
Wall Street also suffered one of its worst days in recent history, with Dow dropping more than 1,500 points. The ADR of the Supervielle Group already registered a fall of 12.06 percent, the Galicia Financial Group down 12.03 percent, and Mercado Libre down 12.16 percent.
Elsewhere, Argentine bonds fell to record lows on Monday, complicating the ongoing negotiations between the government and private creditors to restructure the nation's debt.
Already struggling from an economic crisis, Argentina's hundred-year dollar bond fell 12 percent to 34 cents per dollar.
The global panic coincides with a critical week for Argentina's debt talks given that Economy Minister Martín Guzmán, who was expected to give a formal offer to the creditors.
While the fall in bonds can strengthen the government's hand, it also increases financial pressure on creditors to obtain a good deal.
"I doubt this helps negotiate debt," said Alejo Costa, chief Argentine strategist at BTG Pactual in Buenos Aires. "Because in any case the buyer will mutate to the distressed investor, more likely to litigate if the offer does not seem reasonable."
Argentina is also renegotiating a record credit line of US$56 billion with the International Monetary Fund (of which US$44 billion was been delivered).
Guzmán intends to conclude negotiations with private creditors by the end of March, a schedule that many analysts say is very tight. It is estimated that the Argentine economy will contract in 2020 for the third consecutive year, with a high level of unemployment and inflation of 53 percent.