Argentina's Bonds, Stocks End July Lower Ahead of Central-Bank News

   By Ken Parks 
 

BUENOS AIRES--Argentina's bonds and stocks fell in the last trading day of July as investors waited to see if the U.S. Federal Reserve and European Central Bank will announce further stimulus measures later this week.

Turnover on the local fixed-income market was 598.7 million pesos ($130.6 million) on Tuesday, accounting for about 71% of the total volume of securities traded on the exchange.

"Events abroad hit us [Tuesday]. There weren't any local data that hit the [Argentine] markets," said trader Francisco Marra at Bull Market Brokers, who sees value in U.S. dollar-denominated GDP warrants and bank stocks.

European and U.S. stock markets closed lower as investors fretted that central banks might not deliver enough stimulus to boost the global economy.

The Bonar X closed 0.5% lower in price terms at ARS508.00, yielding 4.91%.

The Bocon 2014 fell 0.5% to ARS92.00, yielding 19.10%.

The Bonar 2015 closed 0.5% higher at ARS128.20, yielding 17.17%, while the Boden 2015 fell 0.5% to ARS572.75.

The 2035 peso-denominated GDP warrant closed 1.5% higher at ARS12.45.

The peso weakened to close at ARS4.5850 to the U.S. dollar on the MAE foreign-exchange wholesale market, compared with ARS4.5750 Monday.

The Central Bank of Argentina regularly intervenes in the foreign-exchange market, buying dollars to build its international reserves and keeping the peso on a slow path of depreciation against the dollar.

The peso lost about 9.6% of its value against the dollar in the last 12 months as the central bank allowed the currency to depreciate at a swifter pace to help exporters struggling with annual inflation that is thought to be running above 20%.

In comparison, the peso weakened 7.6% versus the dollar last year.

Local brokerage Puente said in a note to clients the central bank was absent during the session in the face of limited movements in the exchange rate and volume of just $210 million on the local foreign-exchange rate market.

Since early May, the authorities have blocked most requests to buy dollars, which has caused the gap between the regulated spot-market and black-market rates to widen.

According to the newspaper El Cronista, the dollar was selling for between ARS6.36 and ARS6.45 on the black market Tuesday.

Argentina's benchmark Merval stock index closed 0.6% lower at 2420.41 on volume of ARS30.9 million. The Merval rose 2.3% this month, helping to trim its year-to-date loss to 2.5%.

State-controlled oil-and-gas company YPF SA (YPFD.BA, YPF) fell 4.2% to ARS77.50; steelmaker Siderar SAIC (ERAR.BA) fell 1.3% to ARS1.54; and steel-tube maker Tenaris SA (TS, TS.BA) closed 1.5% lower at ARS128.00.

Among gainers, banking concern Banco Macro SA (BMA, BMA.BA) rose 1.1% to ARS8.14 and phone company Telecom Argentina SA (TEO, TECO2.BA) closed 3.9% higher at ARS16.10.

Telecom reported second-quarter net profit of ARS586 million, down 8% from a year ago.

Write to Ken Parks at [e-mail]

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