Brazilian hedge funds pummeled on Argentine market rout

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Brazilian hedge funds pummeled on Argentine market rout

On Tuesday, the 13th of August 2019, a basket of Brazilian hedge funds and brokerages faced off havoc-scale causalities after Monday’s (August 12th) rampage of Argentine assets, while a swath of Brazilian investment funds exposed to Argentine companies ranging from agribusiness to energy distribution to telecom was slumped with heavy downpour amid an intensified sell-off pressure, kinds of which had never been witnessed.

In point of fact, after Argentine PM Mauricio Macri had stomached a landmark defeat against populist opposition Fernandez on a Sunday (august 11th) presidential election, Argentine markets alongside its currency pummeled to a record low figure, which in effect weighed on Brazilian investment funds exposed to a stockpile of Argentine firms.

Further inside the bid, followed by Macri’s terrible defeat on Sunday (August 11th), a Sao Paulo-based investment fund, Newfoundland Capital Management posted a loss of more than $55 million over its imprudent bet on four Argentine companies.

Aside from that, NYSE-listed shares of Electricity Distributor, Edenor rammed 59 percent on Monday (August 13th), accountable for 16 percent of Newfoundland’s entire portfolio. On top of that, an overwhelming fret among the investors that a new government of Fernandez would be exercising an interventionist financial system, even larger bond holders could not avert impacts of a tempestuous market outlook in Argentina, while Franklin Templeton’s $33 billion worth of Global bond fund with 3.64 percent invested in Argentine sovereign bond, had been down by 1.79 percent on Monday’s (August 12th) market closure, data from Morningstar, a US-based global investment fund revealed on Tuesday (August 13th).