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: Cotización), 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...