Re-emerging markets?
Anyone who knows me well will know that my two favourite countries are Poland and Argentina. Poland is an emerging market with 5% GDP now, but the little brother of Argentina has lacked behind in recent years.
For a long time Argentina was borrowing heavily from the global bond markets to finance its debt. The country has defaulted twice in 2001 and again in 2014. This deadlock was recently resolved in March 2016 when nearly $5 billion was paid to Elliot Managment and others. Even the name sounds like some kind of capitalistic vulture.
Following this escapade, the country somehow managed to raise nearly $20 billion in foreign debt in 2016, and has raised bonds for the first time in 15 years.
Macroeconomic basics
Whilst the overseas money starts to trickle in from investors we cannot ignore the macroeconomic signals for Argentina. Inflation continues to be rampant, and was heading towards 41% annually in 2016. The Central Bank key interest rate is currently 24.75%. Try making a mortgage payment on that one!
All this puts downwards pressure on their beloved Peso currency, and this could lead to further signs of economic weakness.
Argentina does have a chance to join the emerging markets like Poland, and the MSCI will make a review of Argentina's emerging market status in June 2017. I hope for the sake of @jlufer and his family that the answer is yes.
The signs for emerging markets status for Argentina are rosy. Macroeconomics are not so great, but the country has done away with capital controls and the MSCI should take into account their economic development sustainability model as well. I predict they will obtain this status in June and join their bigger brother Poland. That would be my one wish for 2017.
Love and best wishes to @jlufer and all his family in Argentina.