Argentina's Stock Pulls Back

Argentine stocks pulled back Friday as investors took profits following the new 2009 high set by the Merval Index earlier this week. Argentina's Merval Index shed 0.79% to close at 2,207.28 points. Despite the profit-taking, prices partially rebounded near the end of trade, marking continued investor interest in local shares, said Dionisio Corneille, head of the brokerage bearing his name. There were also some big gainers despite the general losses. Electricity transmission company Transener Cia. (TRAN) surged 8.85% to close at ARS1.23 ($0.32) on expectations of solid second quarter earnings and a repositioning from other service companies, which had left Transener behind during the recent rally, Corneille said. Telecom Argentina S.A. (TEO, TECO2.BA) jumped 1.53% to ARS13.25 following news late Thursday that the company paid off the last $352 million owed on a $1.9 billion loan extended in 2005. Telecom paid off the debt five years ahead of the payment plan agreed with creditors. Meanwhile, bonds posted moderate gains on continued momentum following government talk of resolving the ongoing conflict with the holders of defaulted debts and resuming relations with the International Monetary Fund. While government officials say they are looking to reach a deal, investors are keen to see the actual steps. Some opted to take profits due to the lack of progress, Corneille said. Goldman Sachs said Friday: "It is now imperative that the authorities move without much delay from market-friendly rhetorical statements to genuine good-faith steps to deliver on some of those promises. That outcome would preserve the current market goodwill and could also be the harbinger of additional positive market gains and sovereign credit rating upgrades." The benchmark peso-denominated bond rose 0.82% in price terms to ARS97.80, to yield 12.46%. The dollar-denominated Boden 2012 rose 0.62% in price terms to ARS307.40, to yield 14.32%. There was strong pressure on the dollar again Friday, forcing the government to buy $200 million to keep the peso from strengthening. The Central Bank pumped over $500 million into the local foreign exchange market this week to support the greenback. The peso fell to 3.8225 to the dollar on Friday from 3.8200 on Thursday.