Category: Argentina

Argentina’s pension funds recorded an average annual rate of return of 21.25%, in the 12 months to September, well above the rate of 7.95% last year. Most of the country’s 12 pension funds are controlled by foreign-owned banks. However, the highest return (38.49%) was recorded by Nación AFJP, controlled by state-owned Banco de la Nación. The pension funds market controls assets of around $22 billion.

The volume of Argentine ADRs traded in September was 36% up on the previous month, bringing the volume for the year to $9.2 billion, up 122% when compared with the same period last year. Pipeline services company Tenaris was the star performer, with volumes increasing by 20% in September, 165% up year-on-year. Volumes of Latin American ADRs as a whole have risen by 24% when compared with 2004.

Continued intervention by the Argentine Central Bank in the currency market to buy dollars has pushed the country’s international reserves to over $26 billion. This is the highest level seen since April 2001. So far this year, reserves have risen by $6.4 billion, already above the $5.5 billion acquired last year.

Celular telecoms operator Personal, owned by Telecom Argentina, is to launch $500 million of negotiable notes, possibly in tranches, and perhaps with an international tranche depending on market sentiment at the time. No date has been set for the offering.

Venezuela and Argentina have signed an accord that allows Venezuelan state-owned PDVSA to buy a refinery in Campana in the province of Buenos Aires from Argentinian firm Rutilex Hidrocarburos Argentinos SA. The refinery has a production capacity of 8,000 barrels a day. The agreement was made late on Thursday night in Brasilia and presented against the backdrop of the First Summit of South American Community of Nations on Friday. Another accord announced was between Repsol YPF of Spain, PDVSA and Argentina. The accord allows Repsol YPF access to more oil fields in Venezuela and sees the Spanish company support PDVSA activity in Argentina by allocating up to 10% of its crude oil production in that country to the Venezuelan entity.

Argentina has sought to dispel any ambiguity, saying it has no plans to offer a new debt swap for those debtholders who chose not to participate in the sovereign debt exchange in February. A widely reported statement by Chile’s Finance Minister, representing Southern Cone countries late last week, indicated that Argentina may be ready to negotiate with those investors still holding out. The IMF has put considerable pressure on Buenos Aires to settle the issue of its outstanding debt ahead of resuming any credit program.

Domingo Cavallo, Argentina’s ex Economy Minister and thought by many in the country to be the architect of its economic collapse, has announced he will withdraw his candidacy as a deputy, putting an end to his planned political comeback. He said he was stepping down as a candidate one month before parliamentary elections because of a lack of support from his party. He returned to Argentina from the US in July to campaign for election as a deputy for the City of Buenos Aires.

Argentina has abandoned its plans to issue US currency bonds citing unfavourable market conditions and said it will look to other sources of financing to service its debt. A lack of demand for the new dollar-denominated Boden 2015 saw investors demand yields well above the 7% the government was prepared to pay.

State-owned oil company Petrobrás and federal energy company Eletrobrás have signed an agreement which will allow the former to sell the latter its indirect stake in Transener, Argentina’s largest electricity supplier. Antimonopoly authorities in Argentina had ordered Petrobrás to disinvest itself of its stake in the energy transmitter.

Argentina has set a date of 3 October for its return to the international market with the launch of the first tranche of its $2 billion Boden. The first tranche will be for $1 billion. The dollar-denominated Boden 2015 will be issued through private and public placements. This is only the third issue in US dollars the sovereign has made since it defaulted on its debt in 2002. The country issued a peso-denominated Boden 2014 in May this year for a total of just over $1 billion, and two dollar-denominated Boden 2012 in July and August totaling $792 million.