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Montevideo, November 23rd 2017 - 18:45 UTC

Markets (and investors) in Argentina waiting for Sunday primary results

Tuesday, August 8th 2017 - 15:41 UTC
Full article 10 comments
Esteban Bullrich is still climbing and has reached a technical tie with Cristina Fernandez. In the picture next to governor Maria Eugenia Vidal  Esteban Bullrich is still climbing and has reached a technical tie with Cristina Fernandez. In the picture next to governor Maria Eugenia Vidal
The Central bank intervened on Monday with US$ 165 million to keep the exchange rate below 18 Pesos to the US dollar The Central bank intervened on Monday with US$ 165 million to keep the exchange rate below 18 Pesos to the US dollar

The technical tie for the Senate seat in the province of Buenos Aires is being closely followed by the business community and potential investors in Argentina, fearing that a victory by ex president Cristina Fernandez over the candidate sponsored by president Mauricio Macri, could be interpreted as a longing for the hand-out and subsidies policies of Kirchnerism and rejection of the current economic reforms which have yet to deliver enough jobs and stable prices.

 However and working on the assumptions of the reliable Argentine pollsters, which are the least, the parity indicates that Cristina Fernandez and her Unidad Ciudadana has a 0.3 percentage point lead over Esteban Bullrich, less than six days to the compulsory primaries next Sunday which will choose the candidates for the midterm elections of October.

In effect Cristina Fernandez carries 33% of vote intention, while Bullrich 32.7%; however in July the difference was 1.5 percentage points, 33.4% and 31.9%, which makes it a technical tie. Likewise it is the third candidate Sergio Massa who has advanced most from 19.4% to 22.7% currently.

So it is hard to anticipate a result, but the tendency seems to favor the Macri candidate. Much will depend on the urban belt that surrounds the capital Buenos Aires by opposition to the extended urban rust-belt, still waiting to recover many of the lost jobs. In the rest of the rich farm land of the province Macri and his policy eliminating Kirchnerite levies on produce and promoting exports making him unbeatable.

In the race for Lower House benches, there is also parity, but with the Macri candidate ahead closely followed by Unidad Ciudadana. Graciela Ocaña has a vote intention of 32.4%, while Fernanda Vallejos, 30.8%, and the third candidate, Felipe Solá, 22.1%.

Reliable polls also indicate that overall, leaving aside the specifics of primaries, 36.5% of voters in the province of Buenos Aires prefer the ruling Cambiemos (Let's Change), followed by Unidad Ciudadana, 32.1% and the Renewal Front combo 16.3%. Less than 6% did not reply and the rest was divided among small parties.

“In the province of Buenos Aires the election has become a de-polarized technical tie since Cristina and Bullrich have 32.7% and 32%, while Massa has climbed to 22%”, said Enrique Zuleta Puceiro, who adds that Let's Change shows a tendency to keep advancing, but not necessarily Bullrich.

“This is because the popular governor of the province Maria Eugenia Vidal joined the campaign and she has a strong standing in the province”, pointed out Zuleta Puceiro.

“This does not mean Cristina will make it to the Senate, but if it happens it's not the end of the world. On several occasions midterm elections have upset incumbents”.

However on Monday the main index of the Buenos Aires Stock Exchange, Merval fell 1.03%, closing at 21,479.78 points, with uncertainty rising as primary legislative elections draw near. Eduardo Fernández, an analyst at Rava Bursátil, said that investors are reluctant to take new positions in risky assets before the primary election results.

Meanwhile the US dollar trade again showed an upward trend, hitting an intraday high of 17.72 Argentinean pesos, but the central bank intervened to prevent it from rising more, and the currency settled at 17.70 pesos (+0.17% ) after the bank pumped US$ 165 million to the market. On the street the dollar was traded at 18 pesos, which seems to be the Argentine government barrier to avoid surprises before the elections.

Top Comments

Disclaimer & comment rules
  • Zaphod Beeblebrox

    Are you worried that it is so close? Whatever happens it doesn't look like a dramatic U-turn in your hero's political fortunes. A narrow victory in her chosen seat wouldn't be the most ringing of endorsements.

    Aug 08th, 2017 - 10:09 pm +2
  • Marti Llazo

    Wrong years, reekie. We are in 2017 now. The trend was from 40 percent in 2016 to about 25 percent for 2017.

    Since the CFK INDEC was never exactly honest, we certainly don't trust her government's claims about low inflation.

    Aug 12th, 2017 - 02:44 am +2
  • Sinibaldi

    In the part of a melody...

    Near a small
    oak a fine bird
    is singing and
    this melody,
    with a little
    desire, arrives
    in the darkness
    to cover a feeling...

    Francesco Sinibaldi

    Aug 09th, 2017 - 03:44 pm 0
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