After the primary legislative elections, the value of companies that
trade on our domestic stock exchanges skyrocketed. The Merval Stock
Index is up 51.5% YTD, with a 17% rise since the end of June, a
significant rise even when adjusted for a stronger dollar.
By the eve of the 2017 primary legislative elections, the Merval Stock
Index (adjusted in dollar terms) had lost almost all of its year-to-date
gains. Since then, the leading market indicator has rallied to break above
the USD 1,410 level it had tested between May and July.
The following chart summarizes the performance of the different components
of the Merval Stock Index.
As is customary at the beginning of each quarter, the weight of each of the
components of the Merval Stock Index is adjusted according the previous’
quarters trading activity. The following chart shows the new weightings
according to the latest projections from Instituto Argentino de Mercado de Capitales (Argentine Institute
of Capital Markets). The current iteration of the index is significantly
more “democratic” than in previous years. None of the 27 companies that
make up the index crack the 10% share level, whereas five years ago, the
top three companies represented over half of the index’s portfolio.
In local fixed income markets, hard dollar bonds have shown positive
performance, particularly in mid to long term maturities, with yields
falling about 50 basis points.
On the other hand, fixed coupon peso bonds have seen their value drop
significantly in light of persistent inflation and a moderate rise in
yields for short-term central bank bills.