Argentine stocks rise on pension fund demand

jueves 25 de octubre de 2007 18:31 ART

BUENOS AIRES Oct 25 (Reuters) - Argentine stocks rose on Thursday, fueled by capital repatriated by private pension funds after the government obliged them to cap their investments abroad, traders said.

The Merval index .MERV of 25 leading stocks rose 1.15 percent to 2,282.57 points, driven by a 14.2 percent surge in entertainment group Comercial del Plata COM.BA stock.

Traders said the company's shares rose on rumors that the local courts are about to approve its long-delayed debt restructuring agreement with creditors.

The Argentine government announced last week that pension funds -- the most liquid players in the local market -- had to scale back their investments in other Mercosur countries to help expand credit for local firms and projects.

The Mercosur trade bloc includes Argentina, Brazil, Paraguay and Uruguay as full members.

The government move means the funds will have to bring 2.83 billion pesos ($877.5 million) back to the Argentine market before year's end.

"The Merval was not affected by the weakness in external markets because of strong liquidity," said Diego Zabaleta, a trader at Besfamiglie brokerage.

Volume at the Buenos Aires Stock Exchange was an unusually big 202.5 million pesos ($62.8 million).

Bond prices in the local market rose on news the government was buying back $500 million in restructured debt to comply with a commitment made during the country's 2005 sovereign debt swap.   Continuación...