Argentina
Argentine Stocks May be Ready for a Rebound
After defaulting on its debt in 2001, Argentina was shunned by international investors. Last year, Argentina was booted from the MSCI Emerging Markets Index. However the economy of Argentina may be ready for a rebound and catch up with the growing Latin American economies of Brazil and Colombia. In2001, Colombia was considered a failed state but since then the stock market has shot up fifteen times. Similarly Brazil could not service its debt in 1999 but now is the region’s and also one of the world’s red-hot emerging markets.
According to a recent article in Bloomberg Businessweek some investors are betting on a strong recovery in Argentina. The Merval stock index is up 163% since the credit crisis lows in November 2008.
Some of the reasons for the optimism mentioned in the article include:
- The Argentine government is trying to raise cash and build good relations with global creditors ahead of the presidential elections in 2011. After the rescue of Greece with an estimated $1 Trillion package, the outlook for Argentine debt swap deal is positive.
- The outlook for the export of agricultural products to other emerging markets is high
- Due to the availability of plenty of fertile lands, 54% of Argentina’s export is agricultural
- Publicly-traded banks are attractive compared to peers in the region
In terms of investment opportunities, there are a few ADRs that investors can consider. BBVA Banco Frances (BFR) has a market capitalization of $1.1B.The current yield on its ADR is 0.98% and the beta is 1.5. Banco Macro(BMA) pays a dividend of 2.38%. Oil and natural gas company YPF SA (YPF) is down about 18% YTD. The current yield is 7.94%. Telecom services provider Telecom Argentina(TEO) has a 11.04% dividend yield. Some of the other Argentina ADRs to review include oil and gas producer Petrobras Energia SA (PZE), food producer Credud (CRESY)and electric utility Edenor(EDN).
Argentina ADR Stocks
In this post, lets review the Argentina ADR stocks listed in the US.
Argentina survived a severe economic crisis in 2001-02.After 2002, the country started to recover slowly.The country is blessed with abundant natural resources and has an export-oriented economy. Most of the people are literate and Argentina has the largest European population in South America.
The following table lists the ADRs of Argentina. Important details such as the current yield are provided as well.
| S.No. | Company | Ticker | Sector | Yield | Value of $10,000 Invested 5 years ago | Key Data Point |
|---|---|---|---|---|---|---|
| 1 | Alto Palermo | APSA | Real Estate | 6.85% | $44,742.00 | Shopping Malls |
| 2 | Banco Macro | BMA | Banks | 3.76% | N/A | Raised dividend each year since 2006 |
| 3 | BBVA Banco Frances | BFR | Banks | 6.10% | N/A | Avoid for now |
| 4 | Cresud | CRESY | Food Producers | 0.55% | $17,606.00 | Average performer |
| 5 | Edenor | EDN | Electricity | N/A | N/A | Electricity Distributor |
| 6 | Grupo Financiero Galicia | GGAL | Banks | N/A | $14,340.00 | Average performer |
| 7 | IRSA Inversiones y Representaciones | IRS | Real Estate | N/A | $13,343.00 | Shopping Malls-Avoid |
| 8 | MetroGas | MGS | Gas,H20&Multiutility | N/A | $11,695.00 | Average performer |
| 9 | Petrobras Energia | PZE | Oil & Gas Producers | 1.61% | $18,470.00 | Buy |
| 10 | Telecom Argentina | TEO | Fixed Line Telecom. | N/A | $32,765.00 | PE is 18.50 |
| 11 | Telefonica de Argentina | TAR | Fixed Line Telecom. | N/A | $17,589.00 | Average performer |
| 12 | Tenaris | TS | Industrial Metals | 0.80% | $159,602.00 | Makes Steel Pipes - Buy |
| 13 | Ternium | TX | Industrial Metals | N/A | N/A | Steel Products |
| 14 | Transportadora de Gas del Sur | TGS | OilEquip.,Serv.&Dist | 1.71% | $13,222.00 | Average performer |
| 15 | YPF | YPF | Oil & Gas Producers | 8.60% | $28,675.00 | Excellent yield and in sweet sector |
Note: All data is as of June 10,2008
Argentina is a beautiful country and is popular among seasoned travelers.More information on tourism can be found here.
Photo: World’s Widest Street, Buenos Aires
Credit: www.art.com
