BUENOS AIRES (Dow Jones)–Argentine bonds tumbled Wednesday as investors stampeded out of the country’s sovereign debt as the fallout continued from the government’s move to nationalize the country’s leading oil and gas company, YPF SA (YPF, YPFD.BA).
Investors, particularly U.S. funds, are selling everything with the Argentina stamp on it, said Agusto Farina, analyst at Amirante Galitis brokerage.
President Cristina Kirchner said Monday that she will ask Congress to approve the expropriation of a 51% stake in YPF from its controlling shareholder, Spain’s Repsol YPF SA (YPF, YPFD.BA). Rapid passage by the Peronist-controlled Congress is expected.
One of the biggest losers among the bonds was the peso-denominated 2024 PR13, which slid 4.3% in price terms to ARS98.50 ($22.44), pushing the yield up to 18.15%.
The dollar-denominated 2035 GDP warrants took another whipping, sliding 3.2% to ARS61.
Stocks also suffered in the rush to reduce exposure to Argentine assets.
The benchmark Merval stock index fell 0.9% to close at 2,357.67 points amid heavy volume of ARS104 million.
YPF shares had another dismal day, falling 28.7% to ARS77.05.
YPF’s U.S.-listed shares lost 32.7% when they resumed trading after being suspended since Monday afternoon. The closing price of $13.12 is the lowest price seen in years and well off the 52-week high of $46.60 hit in July.
A number of other companies suffered a similar fate as the mood turned sour on Argentina.
Energy, rail, real-estate and tourism holding company, Sociedad Comercial del Plata SA (CVVIF, COME.BA) plunged 10% to ARS0.63 in Buenos Aires.
While some local investors are mulling whether there’s an opportunity to take advantage of the beaten-down prices, the uncertainty is too much for most.
«In a normal country there could be an opportunity…but there are no rules to the game,» Farina said.
«There’s no doubt that companies are cheap and you could buy expecting a rebound tomorrow, but then what are you going to do?» he said.
The peso weakened slightly to ARS4.401 to the U.S. dollar on the MAE local foreign-exchange wholesale market from ARS4.397 a day earlier.
-By Shane Romig, Dow Jones Newswires; 54-11-4103-6738; shane.romig@dowjones.com
Source: http://online.wsj.com