Argentina: Slight hiccup affects investor appetite

Foreign investors are starting to return to Argentina’s capital markets just five years after the country’s severe economic crisis. However, their confidence has been shaken following the government’s apparent manipulation of the inflation rate for January.

Argentina is attracting some 1.8% of all the money invested in emerging markets’ capital markets, according to Saravia Financial Management, a Buenos Aires fund manager. In the 1990s, when Argentina was the darling of Wall Street, it attracted some 8% but this plummeted to 1% during the economic meltdown of 2001 and 2002.

High spread

According to the JPMorgan Emerging Market Bond Index, the country’s bond issuance has a 205-basis point spread over US treasuries, which is the second highest in Latin America after Ecuador (at around 700bp).

Argentina’s spread has dropped from 5,363bp over US treasuries at the height of the economic...

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Argentina: Slight hiccup affects investor appetite

Foreign investors are starting to return to Argentina’s capital markets just five years after the country’s severe economic crisis. However, their confidence has been shaken following the government’s apparent manipulation of the inflation rate for January.

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Argentina: Slight hiccup affects investor appetite

Foreign investors are starting to return to Argentina’s capital markets just five years after the country’s severe economic crisis. However, their confidence has been shaken following the government’s apparent manipulation of the inflation rate for January.

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