Argentina stock market rises more than 20% after elections

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The Argentine stock market opened this Tuesday with an increase of more than 20% on the first working day after the second round of elections last Sunday, in which the leader of La Libertad Avanza, Javier Milei, won.

Meanwhile, the informal foreign exchange market shows expectations of a devaluation by the new presidential government that will take office on December 10, as the US currency rose from 100 pesos to 1,050 pesos per unit.

The S&P Merval index of shares of leading companies listed on the Buenos Aires Stock Exchange rose this Tuesday by 20.76% to 779,056.93 points, almost half an hour after opening, while the S&P BYMA General Index rose by 21.27% increased to 32,636,928.73 units.

The Argentine stock market rose, particularly thanks to the oil company YPF

The local market’s positive reaction to Milei’s victory comes after the strong rise in Argentine stocks on Wall Street this Monday, led by the 39.9% rise in shares of the Argentine state-controlled oil company YPF, confirmed by the President-Electoral Minister this Monday that he wants to privatize government bonds under foreign law and increase them by up to 7.6%, although in practice this is not that easy.

Argentina’s country risk index falls this Tuesday to 2,198 basis points from 2,411 recorded last Friday before the second presidential round, showing that debt markets also remain closed for the South American country.

In the official foreign exchange market, the official wholesale exchange rate rose by 2.15 cents to 356.1 pesos per unit this Tuesday, confirmed by the monetary authority.

The dollar on the stock exchange rose 1.7% to 887.58 pesos

However, on the local futures market, operators indicated that they expect the official wholesale exchange rate to depreciate to 852 pesos per dollar in December, according to the first contracts agreed.

In contrast, the so-called financial dollars performed with a mixed trend, on a day when the government confirmed that half of exports will be settled through the official exchange rate and the other half through so-called “cash with settlement”.

The Counted with Settlement dollar (CCL, which consists of buying stocks or bonds locally with Argentine pesos and selling them in dollars on Wall Street) fell 1.4% to 864.17 pesos per unit.

The “stock exchange dollar” or “MEP dollar” (obtained by purchasing assets quoted in both pesos and dollars and paying in pesos when buying and selling in dollars on the Argentine Stock Exchange) increased by 1, 7% to 887.58 pesos per unit.