Argentina: Stock Market Plunge and Country Risk Reached Highest Level Since March; ADRs Fell Up to 8%
The energy and financial sectors led the losses on the Buenos Aires Stock Exchange.
Argentinian assets had a very bad Tuesday amid poor global market conditions and additional local uncertainties. The S&P Merval index, measured in dollars, dropped to its lowest level since late April.
Argentinian stocks and bonds suffered a widespread collapse on Tuesday, amidst a gloomy global market climate and economic and political uncertainty at the local level. ADRs fell up to 8%, the S&P Merval measured in dollars retreated to its lowest level since April, and the country’s risk level climbed to its highest since March.
Locally, the treatment of the Base Law in the Senate and the expiration of the currency “swap” with China have introduced caution among investors. Argentina might need to come up with around $5 billion to settle the debt with Beijing. What could help Argentina is the renewal of the swap or the International Monetary Fund (IMF) lending the discussed $15 billion.
The S&P Merval index fell by 4.7% in pesos to 1,581,164 units, after accumulating a strong gain of 24.8% during May. In dollar terms, the drop is 5.7%. The energy and financial sectors led the losses on the Buenos Aires Stock Exchange. The leading stocks showing the most significant declines were: Transportadora de Gas del Norte (-7.3%), YPF (-7%), Grupo Supervielle (-6.7%), BBVA (-6.5%), and Pampa Energía (-5.8%).
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