By Taos Turner
BUENOS AIRES--All stocks in Argentina's Merval index rose on
Wednesday, while the black market peso weakened sharply through
most of the day on to strengthen abruptly at the end of
trading.
The peso's late turnaround came after local media reported that
Commerce Secretary Guillermo Moreno called key underground currency
traders late in the day and told them to shut down their
transactions or else he would put them out of business. That led
some traders to immediately start charging less for greenbacks,
according to a report by the daily Ambito Financiero.
For most of the day, the peso lost ground versus the dollar in
the underground black market--eventually falling to ARS9.80, before
climbing to around ARS9.40 versus ARS9.45 in the previous session,
according to the newspaper El Cronista, which publishes rates
collected from black-market traders.
Strict capital controls that limit the amount of foreign
currency Argentines can purchase legally have fueled a parallel
illegal market for dollars where people usually pay a steep premium
for the U.S. currency.
The Argentine peso weakened to ARS5.652 against the U.S. dollar
on the regulated MAE foreign-exchange wholesale market, versus
ARS5.644 in the previous session.
The central bank intervenes in the exchange market daily to buy
dollars and build its foreign currency reserves, while gradually
weakening the peso to help exporters.
Meanwhile, the Merval stock index rose 2% to 3,925.31 in volume
totaling ARS88 million ($15.5 million).
Stocks rose a day after government officials said they would
slap a 15% tax on the purchase of certain securities that are not
publicly traded. Some investors had been concerned the government
would raise taxes on stock and bond transactions to help finance a
reduction in income taxes.
The steel producer Tenaris SA was the most traded stock. It rose
almost 2% to ARS195.
The financial conglomerate Grupo Financiero Galicia SA rose 2.8%
to ARS5.85.
The state-owned oil company YPF SA rose about 1.5% to
ARS148.25.
The DICP discount bond in pesos rose 0.38% in price terms to
ARS0.38 while the 2038 PAVO bond, which was issued under New York
law, fell 4.792% to ARS298.
The TVPE GDP warrant rose 1.18% to ARS85.50.