Argentinian companies praise far-right Javier Milei’s victory on Wall Street. This reaction was also expected in the neighboring country, as the Buenos Aires Stock Exchange was not active due to today’s holiday (Sovereignty Day) in the country. Energy companies benefited the most in the markets: In the first 40 minutes of the session, YPF increased its value by 36%, Transportadora Gas del Sur by 22% and Pampa Energía by 7%. In the banking sector, Grupo Financiero Galicia increased by 23%, Banco Macro by 19%, Cresud by 21%, BBVA Argentina by 16% and Grupo Supervielle by 12%. The share of other companies, such as cement company Loma Negra, increased to 12%, steel company Tenari to 1.8% and Telecom Argentina’s share to 4%.
Due to the holiday in Argentina, transactions cannot be made in banks and exchange offices until Tuesday, but it seems that Set in “dollar-bitcoin” behavior. Since Milei’s victory became known on Sunday night, the price began to rise strongly, even exceeding 1,000 pesos per unit. Argentine bonds traded abroad also reacted positively, with all of them hovering above 4 percent. The GD46 bond, which has a maturity of 23 years, leads the increase with 6.38 percent, followed by GD35 (6.11%) and GD41 (5.70%). .
Markets are waiting for an improvement Future rise of dollar price As a result of the president-elect’s proposal to dollarize the economy at an uncertain exchange rate. It is worth noting that the victory of the far right surprised analysts, who until last week had predicted a Government led by Economy Minister Peronist Sergio Massa, whose proposals did not include immediate significant changes in exchange rate policy.
Of course, the result does not mean that everything was easy for Argentina’s new president. “We believe that Milei’s current lack of a majority in Congress poses a challenge and emphasizes the importance of its alliance with part of the PRO party. It also needs to announce a credible economic team as soon as possible,” explains Alejandro di Bernardo, head of emerging markets debt fixed income at Jupiter AM.
Privatization and dollarization of the economy
Milei wasted no time on his first day as president of Argentina. He gave the following assurance in an interview with Radio Mitre in the early hours of the morning: YPF to privatize Public Television, National Radio and Téla news agencyWhen asked what will happen to the state oil company, M. said, “Everything that can be in the hands of the private sector will be in the hands of the private sector,” but “YPF needs to be reorganized first.”
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The rest of the measures have not yet been announced, but the La Libertad Avanza candidate highlighted several of them during the election campaign. Star measure in economic matters Dollarization and liquidation of the Central Bank. He also advocates “phasing out” welfare schemes and cutting pension and pension funds. Milei also promised “deep regulation” of public sector pay, ending the exchange rate in just three months.
“We predict that Milei will probably take a more pragmatic approach and soften some of his proposals, especially regarding dollarization,” says Di Bernardo. The main factors to monitor before taking office on December 10 will be: implementation of fiscal adjustments and a credible stabilization plan. “However, given limited international reserves, significant fiscal deficits and a delicate transition phase, the risk of implementation is extremely high. We will continue to monitor the situation for clear indications of a new Milei cabinet, as well as for the search for a new government. Technical support from the PRO party,” he said. adds the head of emerging markets debt fixed income at Jupiter AM.