The challenge of the economy in the election year, the volatility of the dollar, the evolution of the Fintech and the best options to invest were some of the themes of the first Forbes Summit Forbes Money. It is presented by Puente and held at Palacio Duhau-Park Hyatt Buenos Aires, which was attended by more than a dozen economists and finance experts among the exhibitors and about 250 attendees.
The heated debate
A heated debate between the president of Banco Nación, Javier González Fraga, and the renowned economist Marina Dal Poggetto, executive director of Eco Go Consultores, was the kickoff of the day. The two time president of the Central Bank defended the government’s economic policy, saying that they are better off than last March. Since they managed to avoid a hyperinflationary period. And he attributed the current financial volatility to political uncertainty. Stemming from the fear that expropriating populism will return.
Dal Poggetto, on the other hand, warned that the government’s policy saying that, it is very contractive and did not have the desired impact on inflation. Because the administration of Mauricio Macri did not take into account the contractual component of the tariffs. He agreed that they do not hit head on, although there is a greater recession and slower inflation slowdown. If there were green shoots, they withered.
The situation was also the central theme of the Banking panel
There, Isela Costantini, CEO of GST-Servicios Financieros, highlighted that the situation of SMEs is increasingly worrisome. “We see small and large companies that are dragging debts and entering into competition . And a company that dies are jobs that are lost”.
Isela Costantini participated in the panel Banks together with Facundo Gómez Minujín, of JP Morgan and Gabriel Martino, of HSBC.
In contrast, the CEO of HSBC Argentina, Gabriel Martino, and Facundo Gómez Minujín, President and Senior Country Officer of J.P. Morgan for Argentina, Uruguay, Paraguay and Bolivia, pointed out that the financial system is solid and responding to the crisis. However, they recognized that there is electoral uncertainty because beyond the candidates, the people are divided in the way of the country they want. According to the voice of Gómez Minujín, Martino called for disruptive reforms for those who assume, especially in labor legislation, the pension system and justice.
How to get out of the crisis?
The economy is not productive and the public sector is too big. You have to shrink it, reduce the tax pressure and only there will increase the rate of investment and the economy will grow again. A reduction in evasion and the size of the public sector must be achieved. Only there will be room for the private sector to grow. This was a recommendation from the well-known real estate developer Eduardo Costantini, in a hand in hand with Alex Milberg, director and publisher of Forbes.
In search of liquidity
Costantini shared one of his recipes of success in long term projects like Nordelta. He said, you have to stay always liquid and not take debt. Exactly, that was also one of the main recommendations of the finance experts in the panel called Money Making, which was moderated by Leonardo Chialva, Partner at Delphos Investment.
“In addition to the macro, the election process has impregnated all investment decisions in the short and medium term. So that by investing it would cut the curve a lot to avoid volatility and whatever is in pesos that is as liquid as possible. Since any new black swan can affect the portfolio”said Anna Cohen, CEO and President Cohen SA.
Pablo Santiago, Managing Director of Wealth Management of the Mariva Group, recommended to appeal to private debt. According to him, they weighted bonds on shares, and to the United States and some emerging ones on Europe. He agreed with Nicolás Bendersky, Corporate Bank Head of Citi Argentina, noting that today, corporate bonds are trading below the sovereign, although rates are still high. For this reason, companies choose other debt instruments, often linked to multilateral ones.
Federico Tomasevich, president and main shareholder of PUENTE, agreed with them, noting that after a decade of very low rates, the FED raised it. That made the corporate and sovereign bonds begin to yield. Today we see that money yields, even when there is almost no risk.
The evolution of FinTech
The link between technology and finance was also the subject of debate. There, Tomás Reboursin, General Manager of Means of Payment of Prism, considered that they expect an evolution, not a revolution in the patterns of use of the new means of payment. He said that the industry should appeal to big data to be assertive about the needs of users, to try to generate better experiences.
Alejandro Muszak, founder and CEO of Wenance, emphasized in turn that the opportunity for the sector is enormous. Although there must be signs of transparency, professionalism and improving the macro to take advantage of the strong interest of external funds to invest in Argentina. Mario López, Cofounder of PoincenotTechnology Studio, also highlighted the potential of the local FinTech. And highlighted the role of the Central Bank in modernizing the legislation. Among the contras explained that, there are many difficulties in the assembly of equipment, since the talent from home, in Bermuda and out. That’s why the costs go through the roof.
The closing was in charge of the renowned economist Ricardo Héctor Arriazu, who, greeted with applause, explained how macroeconomics is beginning to come out of the recessive channel. Thanks to the impulse of the countryside and the narrowing of fiscal and trade deficits, among other factors. However, he warned that variables not controllable or predictable, such as the lack of confidence and the decisions of the private sector to dollarize. And can complicate everything, particularly because of the exchange rate system imposed by the IMF. Which is horrendous and dangerous.