Argentine Merval Stock Index Jumps to Record as RBC Raises Growth Forecast
By Camila Russo - Sep 20, 2010 5:46 PM GMT-0300
Argentina’s Merval stock index climbed to a record on speculation the economy will improve after RBC Capital Markets increased its forecast for the nation’s growth.
Grupo Financiero Galicia SA, Argentina’s largest consumer lender, and BBVA Banco Frances SA climbed, leading an advance among financial stocks, after the price of the nation’s bonds increased, signaling higher values for banks’ holdings in fixed- income securities.
The nation’s gross domestic product will probably expand 9.2 percent this year, more than a previous estimate of 6.5 percent, Nick Chamie, global head of emerging- markets research at RBC in Toronto, wrote in a research report.
The Merval index climbed 2.4 percent to 2,533.29 at the close of trading in Buenos Aires at 4 p.m. New York time, surpassing its high from April 9.
“The market is up mainly because bonds are performing well,” said Walter Chiarvesi, an analyst with Banco Santander SA in Buenos Aires. “Argentina’s risk is higher than the rest of Latin America but the country’s fundamentals are better than its risk spread.”
The extra yield investors demand to hold Argentine dollar bonds instead of U.S. Treasuries fell ten basis points, or 0.1 percentage point, to 651 today, according to JPMorgan Chase & Co., the highest after Venezuela and Ecuador among countries in the bank’s benchmark emerging-market index.
Petrobras Argentina SA, the Argentine unit of Brazil’s state-controlled Petroleo Brasileiro SA, rose 1 percent to 6.08 pesos, as crude oil increased for the first time in five days on speculation the U.S. economic recovery will accelerate.
To contact the reporter on this story: Camila Russo in New York at
crusso15@bloomberg.net