Argentina stocks, bonds plunge on pension reform plans

martes 21 de octubre de 2008 18:15 ARST

(Updates with closing prices, details)

BUENOS AIRES Oct 21 (Reuters) - Argentine stocks and bonds plummeted on Tuesday in anticipation of a government proposal to take over almost $30 billion in private pension funds, key players in the country's capital markets.

But the peso currency closed slightly stronger in interbank trade, which traders attributed to the Central Bank's injection of $300 million into the market. The Central Bank declined to provide a figure.

The MerVal stocks index .MERV slid a steep 10.99 percent to close at 1046.68 points, the lowest close since September 2004, after plunging by as much as 13.8 percent earlier in the day.

Pampa Energia (PAM.BA: Cotización), the country's biggest integrated energy company, lost a dramatic 31.8 percent to 0.253 pesos per share. Pampa is weighted as 9.1 percent of the Merval.

Major Argentine telephone company Telecom (TEC2.BA: Cotización) (TEO.N: Cotización) tumbled 22.62 percent to 5.3 pesos per share.

On the broad market, volume was brisk at $36 million. Of active issues 64 declined, 23 advanced and four were unchanged.

"The big fall in the MerVal is logical given local and international circumstances. On the domestic side the nationalization of the AFJP will affect liquidity in the capital markets. On the international side you have growing signs of a recession," said Hernan Labrone, analyst with Fenix Compania Financiera in Buenos Aires.

Government bond prices also wilted, closing down 7 percent on average in local trade, led by a 13.5 percent slide in the dollar-denominated Boden 2012 ARBODEN12D=RASL and the 11.9 percent nosedive by the dollar Discount bond ARDISCD=RASL.   Continuación...