Argentine ETF trading surges after election, led by small investors
20/11/2023 17:45
By Suzanne McGee
Nov 20 (Reuters) - An exchange-traded fund (ETF) focused
on Argentina's stock market surged on Monday after the electoral
victory of Argentina's Javier Milei, a radical libertarian who
promised voters economic shock therapy.
The Global X MSCI Argentina ETF ARGT.N , which offers
exposure to a basket of the country's most liquid stocks, soared
more than 13% on Monday and hit its highest level since
September.
While the South American country's markets are 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 through large amounts of small
trades, Todd Sohn, an ETF analyst at Strategas in New York,
said.
By mid-morning, the value of trading in the ETF had topped
$11 million, compared with average of about $1 million a day
throughout 2023. Most of those trades came in blocks of 100
shares or even fewer, Sohn said.
"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
marketmakers and wealth management and advisory firms catering
to high-net worth individuals and families.
ARGT, one of a number of small country-specific ETFs,
currently has only about $56 million in assets. By far its
largest holding is 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 39.7%, 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 and Andrew
Heavens)
((Suzanne.McGee@thomsonreuters.com;))