Argentina Bonds Rise Along With Global Risk Appetite

       By Shane Romig 

    BUENOS AIRES--Argentine bonds and stocks continued to gain ground Thursday as another day of gains on Wall Street stoked investor risk appetites.

    The stars were Argentina's beaten-down GDP warrants, which pay out based on economic growth during the previous year. While the warrants won't pay out in 2013 due to the country's lackluster 1.9% expansion in 2012, some investors are betting that growth will pick up enough this year to meet the 3.26% threshold needed for a 2014 payout.

    Peso-denominated GDP warrants shot up 6.2% to ARS6.72 ($1.32), while the dollar warrants added 3.5% to close at ARS48.00.

    With Wall Street touching new highs, local bonds keep posting significant gains due to global risk appetite, financial advisers Estudio Ber said in a market note.

    Demand is centered on Argentina's short- and medium-term dollar bonds, Ber said.

    The dollar-denominated 2017 Global bond rose 0.2% in price terms to ARS689.00.

    Stocks enjoyed the same boost from overseas gains. Argentina's Merval Index of leading shares jumped 1.1% to close at 3,499.25 points.

    Steel tube manufacturer Tenaris (TS, TEN.MI) rose 3.1% to ARS173.75, while BBVA Banco Frances (BFR, FRAN.BA) added 2.5% to close at ARS12.40.

    The Argentine peso lost ground against the U.S. dollar, closing at ARS5.086 to the dollar on the regulated MAE foreign-exchange wholesale market, compared to ARS5.080.

    On the black market, Argentines paid about ARS7.83 to the dollar, unchanged from a day earlier, according to the newspaper El Cronista, which publishes an average of rates collected from underground traders.

    Strict capital controls that limit the amount of foreign currency Argentines can legally purchase have led some people to seek dollars through informal channels and boosting the black market.

    Write to Shane Romig at