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DJ Argentina Stocks Dragged Down By Macro Downgrade; Bonds Firm

Posted on: Wed, 18 Nov 2009 16:01:00 EST

Symbols: JPM

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BUENOS AIRES, Nov 18, 2009 (Dow Jones Commodities News Select via Comtex) --
JPM | Quote | Chart | News | PowerRating -- e>By Shane Romig
Of DOW JONES NEWSWIRES

Argentina's Merval Index of leading shares closed lower Wednesday as a sharp drop in Banco Macro (BMA) weighed on the rest of the market.

J.P. Morgan downgraded Banco Macro from overweight to neutral on Wednesday, sending the company's stock tumbling. Macro shed 6.03% to close at ARS10.90.

The bank's losses pulled down the Merval, which slipped 0.66% to close at 2265.56 points.

Steel tube maker Tenaris (TS) shed 0.06% to close at ARS79.30 after announcing an early dividend payment.

Tenaris said it would pay a cash dividend of $153 million on Nov. 27.

Meanwhile, bonds posted moderate gains on the improved mood ahead of an expected swap for the holders of defaulted debt that had refused to accept the 2005 offer.

The Senate on Wednesday passed a bill that would allow the government to offer new bonds for the defaulted debt. The House passed the bill earlier this month. Congressional approval was necessary due to a 2005 law that expressly prohibited any new offer for the bondholders who rejected the initial deal.

The benchmark peso-denominated bond jumped 2.35% in price terms to ARS113.40, to yield 10.94%.

The dollar-denominated Boden 2012 climbed 0.75% in price terms to ARS334.50, to yield 9.12%.

The peso jumped to 3.8100 to the dollar from 3.8150 on Tuesday. The Central Bank stepped into the market several times throughout the day to slow the dollar's fall. The government has been buying dollars feverishly in recent weeks to prevent an appreciation of the local currency against the greenback.

-By Shane Romig, Dow Jones Newswires; 54-11-4103-6738; shane.romig@dowjones.com

(END) Dow Jones Newswires

11-18-09 1601ET

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