Argentine markets rally on "holdouts" proposal

lunes 22 de septiembre de 2008 17:46 ART

(Adds closing prices)

BUENOS AIRES, Sept 22 (Reuters) - Argentine bonds and stocks rallied on Monday after President Cristina Fernandez said the government was studying a proposal to reach a deal with "holdout" creditors who rejected a 2005 debt swap.

The MerVal index of leading shares .MERV ended 1.67 percent higher at 1,690.45 points after rising more than 5.0 percent in mid-afternoon trade after the president's announcement in New York, which was carried on local television.

"The president's declarations fed a rise on the MerVal led by bank issues," said Jorge Alberti, analyst with financial Web site

Volume leader Grupo Financiero Galicia GFG.BA, owner of Argentina's biggest bank, gained 4.17 percent to 1.5 pesos per share. Argentine banks are heavy holders of the country's sovereign debt, so they always get a boost from higher bond prices.

Volume on the Buenos Aires Stock Exchange was average at $25 million. Of active issues 51 advanced, 18 declined and 9 ended unchanged.

The news on the holdout offer allowed the MerVal index to buck the global trend in markets on Monday, when most bourses fell due to uncertainty over a United States plan to bailout the financial industry.

In Argentina, locally traded government bonds rose 3.9 percent on average in over-the-counter trade following the president's announcement.

The peso-denominated Par bond leaped 9.7 percent AFPARP=RASL.   Continuación...