Argentina Stocks, Bonds Give Up Early Gains But End Higher

Argentine stocks ended the week flat, giving up gains posted through much of the session as investors pocketed profits ahead of the long weekend. Monday is the May 25 national holiday in Argentina. Argentina's Merval Index held just enough of the earlier gains to end in positive terrain. The index closed 0.09% higher at 1,562.40 points. The slightly higher close on Friday marked five straight days of the Merval closing higher. Local shares "tracked New York in the last hour of trade, losing most of the gains," brokerage firm Portfolio Personal said in a market note. Volume was low at 44.3 million Argentina pesos ($12 million). Bonds also posted moderate gains on continued risk appetite among investors and expectations that the government is poised to launch a much-anticipated debt swap for its dollar-denominated Boden 2012 bonds. The Boden 2012 rose 0.79% in price terms to ARS235.60, to yield 39.53%. The benchmark peso-denominated bond closed unchanged at ARS56.70, to yield 19.58%. The government is expected to offer Boden 2012 holders an early payment on that bond's $2 billion coupon of principal and interest due in August and to exchange other payments falling due between 2010 and 2012 with a new, longer-dated bond. Bonds were rocked in late 2008 and during the first quarter on fears that the government could default on future Boden payments. But with those concerns fading, the Boden has seen its yield drop from 60% in early April to below 40%.