Argentine Stocks Rally on Rising Oil Prices and YPF's Significant Oil Find

Strategic Insights -

Argentine stocks shot up in a significant rally led by oil companies due to rising global crude prices and a major find by YPF SA, Argentina's largest oil and gas company. The Merval Index of leading shares rose 1.9% to close at 3,422.12 points, while the Global X FTSE Argentina 20 ETF rose 2.3% to close at $15.15 in New York. YPF led the gains, closing 5.7% higher at 199.25 pesos on the Buenos Aires stock exchange, following a 5.9% gain on Monday after two major investment banks started coverage of the stock.

Key Takeaways:

  • The Merval Index of leading shares rose 1.9% to close at 3,422.12 points amid moderate volume of ARS61 million ($15 million).
  • YPF SA, Argentina's largest oil and gas company, led the gains, closing 5.7% higher at 199.25 pesos (43 U.S. cents) on the Buenos Aires stock exchange.
  • YPF announced the discovery of at least 150 million barrels of crude oil equivalent in potential reserves at the Loma La Lata Field in the southern province of Neuquen, which ups the company's reserves by 35%.
  • The rest of the oil companies listed in Buenos Aires also performed strongly, with Petrobras Argentina (PZE, PESA.BA) jumping 3.3% to close at ARS9.30.
  • Local banks also had a good day, with Argentina's Banco Macro SA (BMA, BMA.BA) shooting up 5% to close at ARS15.85.
  • Crude futures settled higher, with light, sweet crude for June delivery rising $1.33, or 1.3%, to $103.88 a barrel on the New York Mercantile Exchange.

Statistics:

  • The Merval Index of leading shares rose 1.9% to close at 3,422.12 points.
  • YPF's shares rose 5.7% to close at 199.25 pesos (43 U.S. cents) on the Buenos Aires stock exchange.
  • YPF discovered at least 150 million barrels of crude oil equivalent in potential reserves at the Loma La Lata Field in the southern province of Neuquen, upping the company's reserves by 35%.
  • Crude futures for June delivery rose $1.33, or 1.3%, to $103.88 a barrel on the New York Mercantile Exchange.
  • Brent crude on the ICE futures exchange traded $1.78 higher at $117.68 a barrel.

Sources:

  • Dow Jones Commodities News Select via Comtex, "Argentine Stocks Rise on Oil Companies' Gains," May 10, 2011.
  • Dow Jones Newswires, "Microsoft to Buy Skype for $8.5 Billion," May 10, 2011.
  • Petrobras, "Petrobras Argentina (PZE, PESA.BA) - Financial Information," accessed May 10, 2011.
  • Bloomberg, "Argentina Bond Prices Mixed Amid Euro Zone Concerns," May 10, 2011.