12 MAY PORTFOLIO REPORT: APRIL 2021

ECONOMIC AND FINANCIAL ANALYSIS

In this second stage of the pandemic, where countries are hit by new waves of contagion, the relevant variable to take into account is the speed and efficiency with which countries vaccinate their population. In spite of the possibility of infection, vaccinated individuals are mildly infected, avoid hospitalization and therefore reduce the saturation of the health system.

We divide the countries into three groups: those that have already achieved a considerable vaccination rate, in this select group only Israel stands out with a percentage of more than 60% (there are other countries that fit within this figure but are irrelevant due to their size). The second group, those countries that are vaccinating almost half of their population, includes the United States (41.85%), the United Kingdom (48.72%), Chile (41.61%) and a little further behind Uruguay (32.33%). Finally, in the third group, we have the countries with a much slower vaccination rate. Argentina is in the latter group.

The percentage of the population vaccinated with at least one dose is around 14.4%. The number of people fully vaccinated (with both doses) is 888,247 people, 1.95% of the total population. To the enormous problems that Argentina is dragging along in the treatment of the pandemic, the lack of criteria regarding the super strict quarantine and one of the longest in the world, we must add the lack of current vaccines; lack of predictability and negotiation with the different laboratories.

The total number of deaths per COVID19 case exceeds a figure of 64,000 people, which places us in 14th place. We reached a new sad record of more than 500 fatal cases per day, when in March we were talking about less than 200 cases per day.

In economic matters, the EMAE for February verified the first monthly drop (-1.0%) after nine consecutive months of increase. It also showed a deceleration in the interannual period, accumulating a 2.6% drop in twelve months. Construction, with variations of 11.7%, and the financial sector, with variations of 3.5%, are among the sectors driving the level of activity.

However, in contrast, hotels and restaurants continue to show significant declines (38.2%) and services continue to show year-on-year declines of 17.7%.

The issue of vaccination continues to be key, and there is much talk of a greater responsibility of the BCRA in the management of monetary policy, especially in terms of the rate of issuance to finance the treasury. Let us recall that last year the monetary agency's assistance was record, between advances to the treasury and profit transfers it totaled a monetary aid assistance in the order of 2.0 trillion pesos. However, this huge issuance of pesos was not validated by an inflationary overflow.

Annual inflation in 2020 at the end of December was 36%, exhibiting monthly rates in some months between April and September of less than 3%. This year the story seems to be very different and is confirmed by a significant acceleration in price dynamics, with monthly rates above 4% and growing. In the first quarter of this year, the accumulated variation of the CPI is 13%, equivalent to an annualized rate of 53%. March of this year was the highest monthly inflation, 4.8%.

The Managed Portfolio ended the month positive 7.30%. Our main holdings are: Galileo Event Driven (53%), Amazon (6%), Baba (5%) and FCI Dollar Linked (5%).

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