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"The sovereign needs to get this benchmark curve in place so that the provinces and companies can come to market" |
Leading players in Argentine capital markets say the government must issue a trailblazing Eurobond or global bond if the markets are to take off. The country’s financial markets are more than 20 times smaller than those of Brazil, despite Brazil’s GDP ($1.17 trillion) being less than five times greater than Argentina’s ($250 billion).
Brazil has a mutual funds industry of $525 billion while its neighbour’s is just $8 billion. Brazil’s private pension funds amount to $212 billion compared with $30 billion in Argentina. The total market capitalization of the companies listed on the São Paulo stock exchange at the end of August this year was $1.09 trillion compared with $52 billion for the Buenos Aires exchange.
So far this year there have been 32 IPOs on Brazil’s Bovespa while in Argentina there have been just two listings on the Merval (electricity provider Edenor and banking group Banco Patagonia).
The number of companies listed in Buenos Aires (106) has still not recovered to the number before Argentina’s 2001 economic meltdown (125 at the end of 2000).