Argentine Stock Market Hits Record High
Among the leading stocks, Transportadora Gas del Sur rose 3.6%, BBVA increased by 2.9%, Grupo Galicia gained 1.7%, and YPF advanced 1.4%.
The market continues to deliver good news for Javier Milei’s government. J.P. Morgan’s country risk index showed another decline on Tuesday, adding to other indicators suggesting that economic activity will carry strong momentum into 2025.
Argentina’s new president Javier Milei gestures as he delivers his inaugural speech before the crowd, during an inauguration ceremony at the Congress in Buenos Aires on December 10, 2023. Libertarian economist Javier Milei was sworn in Sunday as Argentina’s president, after a resounding election victory fuelled by fury over the country’s economic crisis.
On Tuesday, January 7, Argentina’s country risk index reached its lowest level since May 2018, reflecting growing investor interest in local assets driven by projections of a significant economic recovery in 2025.
Argentine Country Risk
The J.P. Morgan index, as reported by Reuters dropped again, following a sharp decline on Monday when it broke below the 600-point mark.
Dollar-denominated bonds showed mixed movements. The Global 2035 bond rose by 0.6%, followed by the Bonar 2035 with a 0.4% increase, and the Global 2038 and 2041 bonds both advancing by 0.3%. In contrast, the Bonar 2029 fell by 0.5%, while the Global 2029 and Bonar 2038 declined by 0.4% and 0.3%, respectively.
Analysts suggest that if the current trend holds, the country risk could drop further, potentially reaching around 400 basis points in the coming days or weeks. This improvement is credited to the government’s robust fiscal and monetary policies in 2024 and favorable projections for 2025, including inflation falling below 30% and economic growth reaching 5%.
Fiscal Policy and New Stock Market Highs
Since Javier Milei took office in December 2023 and implemented strict orthodox economic policies focusing on fiscal discipline and inflation control, Argentina’s financial markets have reached new historical highs, supported by fresh capital inflows. The S&P Merval index has surpassed 2,400 points, setting a new record in real terms.
Among the leading stocks, Transportadora Gas del Sur rose 3.6%, BBVA increased by 2.9%, Grupo Galicia gained 1.7%, and YPF advanced 1.4%. Meanwhile, Edenor fell 2.3%, Central Puerto dropped 1%, and Banco Macro declined 0.9%.
In New York, Argentine ADRs also posted strong performances. BBVA led with a 7% increase, followed by Telecom with a 5.3% rise, Supervielle up 4.8%, Transportadora Gas del Sur gaining 4.6%, and Loma Negra advancing 4%.
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