As Argentine Bonds Slump, Macri Adviser Says Market Is Wrong
“Investors seem to have exaggerated the political risks,” Jaime Duran Barba said.
(Bloomberg) -- In the week that Argentina’s bond market fell off a cliff, President Mauricio Macri’s campaign strategist says investors have exaggerated the political risks.
A recent poll showing former president and populist Cristina Fernandez de Kirchner would narrowly beat Macri in October’s election has been given too much attention, said Jaime Duran Barba in an interview. He cited past precedence for his confidence in Macri’s eventual victory.
“I’ve been with Mauricio in campaigns since 2004 and we’ve always won," Duran Barba said in an interview Thursday at Macri’s coalition headquarters in Buenos Aires. "Polls aren’t a crystal ball, they’re just a way of understanding what people want, what they dream about, what they’re thinking."
Duran Barba has accompanied Macri throughout his political career, helping him to victory in elections as Buenos Aires city mayor and president. He declined to provide the government’s internal polling numbers, though he did say that among undecided voters, 45 percent say they would never vote for Kirchner, while only 35 percent say they would never cast a ballot for Macri.
He called on investors to hire their own academic researchers, while recognizing that he is no economist and has never bought a bond. Yields on Argentine bonds rose well into distressed debt territory this week on concern Fernandez will win October’s election, reverse Macri’s free-market policies and possibly default on the country’s debt. The yield on bonds due 2021 slid 26 basis points Friday to 17.49 percent, up from 11.77 percent at the beginning of the month.
‘An Eternity’
Barclays Capital Inc. also played down the importance of recent polls.
The path to the October election “is an eternity for Argentine politics, and many things could change,” Pilar Tavella, an economist at Barclays, wrote in a report to clients. There will be little clarity until June 22, when candidates have to legally declare their campaigns, she said.
Many Argentines have turned against Macri as the economy endures its second recession of his presidency and the inflation rate rises above 50 percent. Even Duran Barba recognizes there is a serious problem, while dismissing speculation that anyone other than Macri would represent the coalition as presidential candidate.
“There is a lot of concern about the economy, and that is hurting us,” he said. “But in the contest of the least worse, we clearly win. We are the least worse.”
At the same time, he recognizes that Fernandez will be a formidable opponent.
“The people who think Kirchner is not going to be a candidate are crazy,” Duran Barba said. “That is impossible. I am not her fan, but she is a very talented politician.”
He added that Argentines don’t trust polls until a month before the election. Investors’ focus on polls now "is absurd," he said.
To contact the reporters on this story: Patrick Gillespie in Buenos Aires at pgillespie29@bloomberg.net;Jorgelina do Rosario in Buenos Aires at jdorosario@bloomberg.net
To contact the editors responsible for this story: Carolina Millan at cmillanronch@bloomberg.net, Philip Sanders
©2019 Bloomberg L.P.