On Monday, the shares of state-owned oil company YPF jumped by 40% after Javier Milei won the presidential election and defeated Economy Minister Sergio Massa. Milei has big plans for the country’s economy, including privatizing YPF. This news led to a surge in the stock price, which reached 38.82% at $14.90 just before 2:00 p.m. EST.
If Milei’s plans succeed, there could be significant changes in Argentina’s economy. Milei aims to revitalize the Argentine economy by using the US dollar and possibly selling off state-run companies such as YPF. He stated in a radio interview that his administration’s goal is to increase the value of companies to make them more sellable and benefit the people of Argentina. The government nationalized 51% of YPF over ten years ago, taking control from Spain’s Repsol. They now manage substantial shale gas and oil reserves.
Argentine stocks and dollar bonds all performed well on Monday, likely due to Milei’s sweeping victory. In addition to YPF, other Argentina-linked equities such as Grupo Financiero Galicia and Banco Macro also gained over 20% in value. The Global X MSCI Argentina ETF also saw gains, going over 11.6% soon after midday in New York.
Milei described his election win as a defeat of a decadent model, stating that there is no turning back. To manage Argentina’s historic inflation, a plan is set to prioritize the dollar over the peso. The anticipation of this new economic era is expected to impact the exchange rate between the peso and the dollar.
In summary, Javier Milei’s victory in the presidential election has caused a surge in stock prices for state-owned companies like YPF as well as other Argentina-linked equities such as Grupo Financiero Galicia and Banco Macro. His plans include privatizing YPF and increasing its value to make it more sellable for investors while also potentially prioritizing the use of US dollars for economic transactions in order to combat inflation in Argentina