Argentine stocks off, peso steady after key meeting

lunes 27 de octubre de 2008 13:23 ARST
 

(Recasts with markets open, updates prices)

BUENOS AIRES Oct 27 (Reuters) - Argentine stocks fell in early trade on Monday but the peso currency and bonds were stable after a government official asked pension fund administrators to refrain from buying dollars and selling bonds when they re-enter the market after a three-day ban.

The peso currency was off just 0.08 percent to 3.2825/3.2850 pesos per dollar ARS=RASL in formal trade between banks. In informal trade between foreign exchange houses, as measured by Reuters, the peso rose 0.7 percent to 3.4000/3.4100 per dollar ARSB=.

"The dollar is going down because of peso needs. But I believe it is a situation specific to this moment since there is still fear in the market," said one trader.

Government bonds traded locally fell on average less than 1 percent <AR/BONOS> after steep losses last week.

The MerVal index .MERV was off 3.98 percent at 854.83 points, led by an 8 percent drop in steel pipe maker Tenaris TENA.BA to 28.6 pesos per share.

National Social Security Administration Director Amado Boudou, who will manage pensions if they are nationalized under a government plan, met with private pension fund managers on Monday and asked them not to buy dollars or sell government bonds.

Argentine markets were devastated last week after the government said it would take over private pension funds holding $30 billion in investments, a move that highlighted institutional weakness and sparked fears that the government was desperate to tap funds to avoid a default.

Last week, the peso ended at a six-year weak point and the benchmark MerVal sank 26 percent. Government bonds traded locally also plummeted 27 percent on average over the week.   Continuación...