"The Merval index, which groups more than 20 major companies in the country, has declined around 30% so far this year, making the local stock market the worst-performing in the world during the first eight and a half months of 2025. The negative streak began at the start of the year, when many investors chose to cash in their profits after a lucrative 2024, and gained momentum in April, at the height of U.S. President Donald Trump's trade war. But the biggest trigger for this poor performance came in early September, with Milei's resounding electoral defeat in the province of Buenos Aires."
"Although these elections seemed relatively harmless, the victory of the leftist Peronism and especially its wide margin of more than 13 points, which no poll had predicted has been a serious blow to Milei's party La Libertad Avanza. Investors are now concerned that the president's reform agenda could be halted, if his party suffers a similar blow in the legislative elections on October 26, where half of the parliamentary seats and a third of the Senate are at stake. With the likelihood of that gridlock scenario increasing, fear has spilled over into the markets."
"Argentina's country risk is above 1,200 points, reaching the highs of October 2024; the dollar has hit new records, surpassing 1,474.50 pesos this Wednesday the level at which the central bank committed to intervene to defend the Argentine currency using its foreign exchange reserves, which it ultimately did by selling $53 million. What's more, access to financing markets remains closed, which Barclays considers highly relevant, as they do not trust that Argentina can meet its obligations without issuing new debt. And to top it off, Merval stocks, which plunged nearly 13% the day after the vote, have yet to recover from the crash. The market is pricing in a much weaker and bumpier adjustment path."
The Merval index has fallen about 30% year-to-date, making Argentina the worst-performing stock market in the world so far in 2025. Early profit-taking after strong 2024 returns and April volatility during U.S. trade tensions worsened the decline. A resounding defeat for Milei in Buenos Aires in early September triggered the steepest losses as investors fear a halt to the reform agenda ahead of legislative elections on October 26. Country risk has climbed above 1,200 points, the peso hit record levels, the central bank intervened with $53 million in reserves, and external financing remains closed.
Read at english.elpais.com
Unable to calculate read time
Collection
[
|
...
]