Unlock Premium Data: Up to 50% Off InvestingProCLAIM SALE

Argentina companies list on U.S. exchanges ahead of expected rate hikes

Published 01/31/2018, 04:35 PM
Updated 01/31/2018, 04:40 PM
© Reuters. Traders work on the floor of the NYSE in New York

By Walter Bianchi

BUENOS AIRES (Reuters) - Argentine companies are rushing to list shares on U.S. exchanges beginning this week to beat an expected hike in interest rates by the U.S. Federal Reserve, analysts said, while taking advantage of an improved investor climate under President Mauricio Macri after years of populist rule.

Airport operator Corporación América Airports (N:CAAP) and power generator Central Puerto SA (BA:CEPU) are expected to raise $1.4 billion between them in listings this week.

Biotech firm Bioceres is expected to raise some $140 million with a listing next week, while food processor Molino Cañuelas (BA:MOLC), energy producer Genneia [EMGSD.UL] and real estate developer TGLT (BA:TGLT) also have both local share sales and international IPOs in the pipeline.

"There is still plenty of money available in global markets. They are taking advantage of the moment ahead of the Fed's promised interest rate hike," said Héctor Scasserra, head of brokerage Arpenta Valores and a board member of Argentina's Bolsas y Mercados Argentinos (BA:BYMA) stock exchange.

An increase in rates by the Fed would likely dampen investor interest in equities. Companies are also seeking to take advantage of a positive outlook for growth in Argentina and investor enthusiasm for Macri's business-friendly policies.

The Fed kept interest rates unchanged on Wednesday, but it is expected to raise borrowing costs in March under incoming central bank chief Jerome Powell.

While many of their Latin American peers have listed on international exchanges in recent years, Argentine companies largely held back, as investors were weary of former President Cristina Fernandez's interventionist policies.

Since taking office in December 2015, Macri has sought to attract foreign investment and develop capital markets. He ended a holding period of foreign capital, passed a reduction of corporate tax rates in an overhaul of Argentina's tax system, and is pushing reforms to labor and capital markets laws.

"The table is set and there are optimistic growth expectations for these companies," said Joaquin Bagües, an analyst at Balanz Capital in Buenos Aires.

© Reuters. Traders work on the floor of the NYSE in New York

Central Puerto could price its 35.5 million share offering at $1.85 per share, while Corporacion America will likely price at the upper end of its $19-$23 per share range to strong demand from funds with exposure to emerging markets, according to consultancy Delphos Investment.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.