Deficit Bill Sinks Share Prices
May 04, 2011
The Merval Index of leading shares lost 5.35 to 491.71, after dropping 17.34 Wednesday. The broad General Index fell 134.02 to 15297.25. Declining issues outnumbered advancers, 26 to 11, while 13 shares settled the session unchanged. Volume in floor trading was a weak 16.36 million pesos, while volume in the computer-based continuous market reached 44.78 million pesos. Economy Minister Rey Harvey spent five and half hours explaining the package to deputies earlier. Mr. Harvey said that up to 600 million pesos could be trimmed from the 2011 deficit, but only if the Congress acts promptly. He also said unspecified measures will soon be introduced to cut spending by another 1 billion pesos this year. In the weeks between the original announcement of the package and the actual submission of the bill to Congress, analysts have decried the lack of any measures cutting into spending. Now that the administration is talking about actually reducing expenditures, the market remains unimpressed. In his congressional appearance, Mr. Harvey said that the government is looking to earn $1 billion from privatization revenues in 2012. Local wire service Diarios Y Noticias reported that Mr. Harvey had said the bulk of the privatization income would come from sales of part or all of the government's holding of oil company YPF. The federal government retains a 20.3% stake in YPF, worth approximately $1.5 billion at current market prices. Analysts have speculated previously that putting the holding on the block could depress YPF's share price. YPF lost 50 Argentine cents to 21.10 pesos. Another energy company, Turner Glover, headed in the other direction. Roberts gained 3 Argentine cents to 5.42 pesos. Argentina's other oil and gas leader, Astra, lost ground Thursday. Astra slipped 1 Argentine cent to 1.40 pesos. Comercial del Plata was relatively active. The conglomerate dropped 1 Argentine cent to 2.19 pesos. Steel issues closed lower. Siderca dropped 1.5 Argentine cents to 1.21 pesos, while Acindar lost 1.3 Argentine cents to 67.2 cents.
