President's death sparks two-year high in trading of Argentine stocks
ArgentinE stocks rose the most in two years in New York trading as some investors speculated the death of former President Nestor Kirchner would lead to a more stable economy and reduced government spending.
The MSCI Argentina Index gained 10pc to 3,458.64 at 10:58am, New York time. It rallied as much as 13pc, the steepest intraday advance since November 24, 2008. Grupo Financiero Galicia SA, the South American country's biggest consumer lender, surged as much as 26pc.
Mr Kirchner, who handed power to his wife Cristina Fernandez de Kirchner in 2007, died after suffering a heart attack, C5N television network reported yesterday. Investors are buying Argentine-American depositary receipts on prospects that "the Kirchner era" of high inflation fuelled by public spending and low corporate investment may end, said Greg Lesko, who helps manage $750m (€545.7m) at Deltec Asset Management in New York.
"Stocks are going nuts," Mr Lesko said. "There is no guarantee that the next person will be any better but change is what the market has been wanting."
Argentine markets, closed yesterday for a public holiday, probably would rally as Mr Kirchner was perceived as an obstacle to investment, Guillermo Mondino, head of Latin America research at Barclays Capital in New York, said.