Argentina markets rise despite S&P downgrade

viernes 31 de octubre de 2008 20:05 ARST

(Updates with closing prices)

BUENOS AIRES Oct 31 (Reuters) - Argentine bonds and stocks rose on Friday despite a Standard & Poor's sovereign credit rating downgrade, which investors saw as predictable move that did not remove buying opportunities among the country's low-priced assets.

Benchmark stocks index the MerVal .MERV rose 3.82 percent to 1,010.79 points, but lost almost 37 percent in October. Volume on the broad market was moderate at $33 million, with 56 advancing stocks, 20 decliners and seven unchanged.

Market heavyweight Tenaris (TENA.BA: Cotización), which makes steel pipes for the oil industry, helped pull the index up by jumping 6.24 percent to 38.3 pesos per share on higher crude prices.

Argentine stocks, bonds and peso currency all had steep losses in October due to the global financial crisis and a surprise announcement by the government that it plans to take over the country's private pension system.

That move was seeing as potentially drying up liquidity on the local market by removing major players, and it also raised fears that the government was taking desperate measures to be able to meet debt payments next year.

On Friday Standard & Poor's cut Argentina's sovereign credit rating for the second time in less than three months, to "B-" from "B," six notches into junk bond territory.

The government lashed back saying its finances were in good shape for next year and questioning S&P's credibility. Also, the planning ministry announced big cuts in energy subsidies that will save the government more than $300 million a year.

On the foreign exchange market, the central bank made hefty dollar sales on Friday in order to prop up the local currency, which has been pressured in recent weeks due to safe-haven dollar-buying by savers and local companies.   Continuación...