U.S.-traded shares of Argentine companies experienced a significant rise on Monday following Javier Milei’s victory in the country’s presidential election.
YPF Stocks Soar
American depositary receipts of Argentina’s major oil company, YPF (ticker: YPF), which is now majority-owned by the government after being nationalized ten years ago, witnessed a remarkable 19% jump during premarket trading.
Banking Sector Reacts Favorably
ADRs of Banco Bilbao Vizcaya Argentaria (BBVA) saw an increase of 8.8%, while Grupo Financiero Galicia (GGAL), another prominent bank, observed a rise of 12% in their ADRs.
Positive Momentum in ETFs
The exchange-traded fund Global X MSCI Argentina (ARGT) also experienced a surge of 13%.
Milei’s Victory and Radical Policies
Javier Milei, who identifies himself as an antiestablishment “anarcho-capitalist,” won against economy minister Sergio Massa in a runoff vote on Sunday. Milei’s campaign focused on radical proposals to address Argentina’s rampant inflation rates of over 140% and widespread poverty. In stark contrast to the current left-leaning government, Milei champions libertarian ideas.
Milei’s proposed reforms include the abolition of Argentina’s central bank and the adoption of the U.S. dollar as the nation’s currency, considering Argentina’s population of 46 million. Additionally, he pledges to reduce the role of government in the economy.
Economic Turmoil and Debt Defaults
Argentina has faced decades of economic turmoil and has borrowed from the International Monetary Fund multiple times. Since 2001, the country has defaulted on its international sovereign debt on three occasions.