42015590 - Horizons Q2 2022_v06

ISSUE 2 | 2022


so the Central Bank will have to disburse more dollars to pay for the gas that the country is importing. However, this is also an opportunity, as having the world's third largest shale gas field opens new potential growth opportunities. It is also important to create the conditions to stop the country needing to import gas, to use the gas produced locally and, if possible, to export it. Argentina’s biggest deal in Q1 2022 saw equity investment fund Advent International, which acquired 51% of the shares of TMT company Prisma Medios de Pago in 2019, buy the remaining 49% for USD 350m and as a result become the company’s sole shareholder, as agreed in the first transaction. Prisma Medios de Pago provides end-to-end solutions including point-of-sale terminals, e-commerce payment gateways, transaction processing and value-added services to all types of retail merchants in Argentina.

with purchases worth USD 1,475m. All investments from Brazil were in their own country. The remaining investments came mainly from the US, with purchases worth USD 1,865m, followed by China (USD 700m), Mexico (USD 407m) and Singapore (USD 400m). The sector rankings were led by and TMT and Energy, Mining & Utilities, with total values of USD 2,339m and USD 1,465m respectively. POLITICAL AND ECONOMIC CONTEXT After many twists and turns, 2022 Argentina’s Congress approved an agreement with the IMF in March 2022. The agreement avoided the country defaulting but also exposed the internal divisions within the ruling party, as the vice-president and her close associates voted against it, which is why support from the opposition party was required. The rupture within the ruling party is already public knowledge, and with a view to the 2023 presidential elections, the movements of possible candidates are beginning to be noticed. After last year's legislative elections, the polls are now showing better numbers for the opposition party. However, it will

be interesting to keep an eye on the new pro-market space being presided over by economist and politician Javier Milei, who, to date, has been identified in different polls as the Argentinean politician with the most positive image. COVID-19 cases are on the decline in Argentina from the peak infection rate of 800,000 cases in the second week in January and have fallen for 10 consecutive weeks with the last week of the first quarter showing a fall of 99.25% from the 2022 high. According to the country’s Ministry of Health, 81.6% of the population are already fully vaccinated. The ongoing war between Russia and Ukraine has caused food prices to rise. This presents an opportunity for Argentina and its agricultural sector, which, as a large producer of grains, is in a favourable position because it means that more dollars will come in from exports. This is causing the government to pay special attention to raising withholding taxes to meet its IMF targets. Likewise, the rise in metal prices may also represent an opportunity to expand local gold production, as it has the ninth largest reserves in the world. On the other hand, fuel prices have also risen,

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