Argentina stocks slide to 5-yr low on pension plan

lunes 27 de octubre de 2008 19:13 ARST

(Recasts; updates prices)

BUENOS AIRES Oct 27 (Reuters) - Argentine stocks tumbled to their lowest level since October 2003 and bonds also fell on Monday, pulled down by persistent investor jitters over a government plan to nationalize Argentina's private pension funds.

Argentine financial markets have been battered in recent sessions by the plan announced by President Cristina Fernandez last week. Fears of a global recession and sagging confidence over the government's economic policies have also weighed on stocks and bonds.

The MerVal index of leading stocks .MERV slid 5.67 percent to 839.77 points in light trade as pensions funds re-entered the market after a court-ordered ban ordered last week.

On Monday, the Argentine official slated to oversee pension programs under the nationalization scheme asked pension fund managers to stop buying dollars and selling government bonds.

"Until the issue over the private pension funds is resolved, falling bond prices will keep pressuring bank stocks and others lower," said Augusto Fariea, a trader at Amirante Galitis.

Shares in Molinos food processing and grain exporting company (MOL.BA: Cotización) broke the trend of falling shares, climbing more than than 13 percent to 8.7 pesos per share after the company said it would buy back up to $136 million in shares at 9 pesos per share.

The local securities regulator last week relaxed rules on company share buybacks as companies asked to be able to support their share prices.

Leading losers was index heavyweight Tenaris TENA.BA (TS.N: Cotización) the world's leading producer of seamless steel tubes for the oil industry, fell 10 percent to 27.9 pesos.   Continuación...