Nearshore Americas

Dozens of Argentinian Companies Capitalizing on Economic Recovery

Dozens of Argentinean companies are lining up to list shares in the stock market as Latin America’s third largest economy shows signs of recovering earlier than many of its regional peers.
“Argentina could soon see a boom in initial public offerings,” reports Reuters. The news comes after Banco Supervielle and Havanna, one of the country’s top food product vendors, raised millions of dollars by listing their stocks.
A senior executive from local investment bank Puente told Reuters that he’s aware of some 20 companies waiting to raise money in the capital market. The sheer number of companies gearing up to raise cash confirms the faith that entrepreneurs have put in Argentina’s new President Mauricio Macri.
Macri put his country’s economy back on track after he paid holdout creditors and outlined measures to cut budget deficit. About two months ago, Argentina sold $16.5 billion of dollar-denominated debt, a resounding success for a country that was once regarded as an economic pariah in the international credit market.
Havanna sold 4.27 million shares, more than double the number of shares it initially wanted to offer in the IPO. Seeing this success, Emilio Ilac, chief executive of Puente, told The New York Times that this was “very encouraging not only for Havanna, but for other companies who want to go public.”
Havanna raised $11.47 million through public offering, while Banco Supervielle raised $280 million. It is the success of these IPOs drawing more investors to the country, underscoring the potential for economic improvement at a time when many other countries in the region are mired in recession and scandal.
In recent months, President Marci has removed export taxes for agricultural products, abolished most currency controls, and taken steps to remove subsidies on electricity, food, and natural gas. Today, according to reports, most of the companies waiting to list their stocks are in energy and agriculture sector.
And to top it all off, index provider MSCI Inc said last week it would include Argentina’s index in its 2017 annual market clarification review for a potential upgrade to emerging market status. This upgrade, Reuters says, might lead to an investment of around $4 billion in Argentinean assets in the near future.

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Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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