Argentina stocks rally on tariff hike reports

lunes 21 de julio de 2008 18:16 ART

(Updates with close, adds peso, bonds)

BUENOS AIRES, July 21 (Reuters) - Argentine stocks .MERV surged 3.9 percent on Monday, led by power companies that rallied on media reports of possible rate hikes for natural gas and electricity, while bonds were also firmer.

The MerVal .MERV benchmark stock index closed at 1,981.76 points after clocking its second-biggest percentage gain of the year, trimming its losses in July to 5.98 percent.

"The bulk of the buying focused on electricity shares ... due to the strong signs that point to a tariff adjustment," said Horacio Corneille, the director of a brokerage that bear his name.

Gains were led by power transmission company Transener (TRA.BA: Cotización), which saw its stocks jump 15.3 percent to 1.13 pesos per share. Another major gainer was electricity distributor Edenor (EDN.BA: Cotización), which rose 11.62 percent.

The center-left government of President Cristina Fernandez made no immediate comment on the media reports that it was considering a tariff increase.

Residential electricity and natural gas tariffs have been largely frozen since a sharp currency devaluation in 2002.

Trade volume on the MerVal was a moderate $47.5 million. Of active shares, 68 advanced, 26 fell and 10 were unchanged.

BONDS, PESO   Continuación...