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Argentina Bonds Up On Growth Prospects; Stocks Track Wall St.

 
   By Shane Romig 
   Of DOW JONES NEWSWIRES 
 

BUENOS AIRES (Dow Jones)--Argentine bonds closed generally higher Tuesday, with the gains led by growth-linked bonds because of a more positive economic outlook for next year.

Late Monday, the president of Argentina's top manufacturers association said GDP is expected to post a 3% decline this year, but is seen rebounding between 3% and 5% next year.

"The international scenario has stabilized, and we have reasonably good expectations as a result. We're starting to see a recovery," said Adrian Kaufmann, president of the Argentine Industrial Union, or UIA.

But the UIA forecast stands in contrast to government expectations, which currently predict GDP growth of 0.5% this year and 2.5% in 2010.

Many economists accuse the government of manipulating data to gloss over the extent of the downturn. The government regularly denies the allegations.

The 2035 euro-denominated GDP warrants shot up 4.40% in price terms to close at ARS47.50 ($12.49).

Bonds also got a boost when Economy Minister Amado Boudou said important steps would be made in December in negotiations with the Paris Club of creditor nations over the $6.7 billion in defaulted loans extended by member countries.

Speaking at the Argentine Construction Chamber earlier Tuesday, Boudou emphasized that a deal with the Paris Club and private holders of about $20 billion in defaulted bonds will allow Argentina to return to international bond markets, closed to the country since the 2002 default.

Meanwhile, Argentine stocks tracked Wall Street, dipping early on and then crawling back in late trade but still closing slightly lower.

Argentina's Merval Index shed 0.15% to close at 2,247.87 points.

The peso fell to 3.8025 to the dollar from 3.8000 on Monday amid heavy buying of dollars by the Central Bank.

-By Shane Romig, Dow Jones Newswires; 54-11-4103-6738; shane.romig@dowjones.com

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(END) Dow Jones Newswires

November 24, 2009 16:41 ET (21:41 GMT)


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