Argentine ETF surges after election, led by small investors (updated)
20/11/2023 21:35
(Updates with closing market data)
By Suzanne McGee
Nov 20 (Reuters) - An exchange-traded fund (ETF) focused
on Argentina's stock market surged in New York on Monday after
radical libertarian Javier Milei won the country's presidency.
The Global X MSCI Argentina ETF ARGT.N , which offers
exposure to a basket of Argentina's most liquid stocks, soared
nearly 11.5% on Monday after trading as much as 13.5% higher and
hitting its highest level since September.
While the South American country's markets were closed on
Monday for a local holiday, U.S.-listed shares of Argentinian
companies also surged in U.S. trading.
The gains for the ETF came on a high number of small trades,
Todd Sohn, an ETF analyst at Strategas in New York, said.
By the time the closing bell rang, the value of trading in
the ETF approached $26 million, compared with an average of
about $1 million a day throughout 2023. That's the second-most
active day of trading ever recorded for the ETF, Sohn said. He
added that most trades were blocks of 100 shares or even fewer.
"There seems to be a lot of random trading by retail
investors playing the volatility" following the election news
and amid speculation about Milei's proposals to tackle
Argentina's economic woes, Sohn added.
Some of the largest investors of record in ARGT as of Sept.
30 include hedge fund Millennium Management LLC, which could not
immediately be reached for comment.
The roster of large shareholders also includes ETF market
makers and wealth management and advisory firms catering to
high-net worth individuals and families.
ARGT, one of a number of small country-specific ETFs, has
only about $56 million in assets. By far its largest holding is
ecommerce company MercadoLibre Inc MELI.O , which accounts for
28% of the fund.
Other Argentina stocks that saw their U.S. listed shares
rally were oil company YPF YPF.N , up 40.1%, and financials
Banco Macro BMA.N and Grupo Financiero Galicia GGAL.O .
"These small country funds are ideal vehicles for small day
traders who jump on events" like Sunday's presidential election
in Argentina, Sohn said.
(Reporting by Suzanne McGee; editing by Megan Davies, Andrew
Heavens and Cynthia Osterman)
((Suzanne.McGee@thomsonreuters.com;))