- Title: Argentina stocks tumble, peso hits record low on MSCI snub
- Date: 21st June 2017
- Summary: BUENOS AIRES, ARGENTINA (JUNE 21, 2017) (REUTERS) VARIOUS OF STOCK EXCHANGE EXTERIOR VARIOUS OF BROKER OPERATORS, WORKING VARIOUS OF SCREENS AND TRADERS AT STOCK EXCHANGE (SOUNDBITE) (Spanish) MARCELO TROVATO, MARKET ANALYST, SAYING: "We maybe expected a wink on a political level but on an economic level, it did not resist any analysis that Argentina would pass to emerging [MSCI emerging markets index] yet. The market had contemplated the possibility of that happening and today the Merval index is operating at 5 percent (drop) and the leading market shares are above a 6 percent drop approximately." LANDMARK OBELISK IN THE HEART OF ARGENTINA'S CAPITAL VARIOUS OF PEOPLE WALKING AROUND IN CITY AND SIGNS ADVERTISING CURRENCY EXCHANGE RATES
- Embargoed: 5th July 2017 18:46
- Keywords: Argentina stocks tumble MSCI Merval stock index
- Location: BUENOS AIRES, ARGENTINA
- City: BUENOS AIRES, ARGENTINA
- Country: Argentina
- Topics: Currencies/Foreign Exchange Markets,Economic Events
- Reuters ID: LVA0016M83OSJ
- Aspect Ratio: 16:9
- Story Text:Argentine stocks tumbled and the country's peso currency fell to a record low on Wednesday (June 21), a day after index provider MSCI surprised investors by not promoting the country to its emerging markets index.
Argentina's benchmark Merval stock index slumped 5 percent, while the peso currency dropped as much as 2 percent to 16.47 per U.S. dollar.
MSCI said it needed more signs that centre-right President Mauricio Macri's pro-market reforms were "irreversible" to reincorporate the country's shares into its emerging markets index, which guides major developing country stock allocations worldwide by investment funds.
Argentina's inclusion as an index constituent would have encouraged funds to invest in Argentina to match or outperform that gauge. The Merval index had risen nearly 25 percent in 2017 ahead of Tuesday's decision in part because investors were betting on an upgrade, which could have triggered inflows.
Argentina's surprise launch of a 100-year bond on Monday was three times oversubscribed, a sign of investor confidence in the longevity of Macri's reforms.
On assuming office in December 2015, Macri declared Argentina open for business after more than a decade of sweeping state intervention, including capital controls, had choked off much foreign investment.
MSCI in 2009 had relegated Argentine stocks to its "frontier" index, which encompasses smaller and less developed stock markets. - Copyright Holder: REUTERS
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