Argentine peso down, stocks seen off on pension move

jueves 23 de octubre de 2008 11:50 ARST

BUENOS AIRES Oct 23 (Reuters) - Argentina's peso currency and bonds slipped on Thursday and stocks were expected to open down, following routs in Mexico and Brazil and in continued dismay over the Argentine government's plan to take over the private pension system.

The peso currency fell 0.54 percent to 3.2400/3.2450 per dollar ARS=RASL in formal interbank trade, and was off 0.9 percent to 3.3250/3.3300 per dollar ARSB= in informal trade between foreign exchange houses as measured by Reuters.

Sovereign bonds traded on the local market fell more than 5 percent on average in early trade <AR/BONOS>.

The MerVal .MERV index of leading stocks fell 10.11 percent a day earlier, dipping below the 1,000 point mark for the first time since September 2004. Trade in stocks opens at 12:00 local time (1400 GMT) on Wednesday.

"The only hope is that Nacion Bursatil (brokerage), which is linked to the government, comes into the stock market to defend prices," said Francisco Marra, analyst with Bull Markets brokerage in Buenos Aires.

Nacion Bursatil is part of the state's Banco de la Nacion and yesterday lifted stocks prices at the end of the session by buying.

Argentina's surprise plan to nationalize private pensions has caused chaos in local markets as investors fear liquidity will dry up because the market's biggest institutional investors could disappear.

Also, investors read the move as a desperate plan by the government to stave off default, although it does resolve short-term debt payment obligations. (Reporting by Walter Bianchi, writing by Fiona Ortiz, Editing by Chizu Nomiyama)