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Argentina Bonds Down On Ecuador Debt Payment Halt;Stocks Rise

BUENOS AIRES (Dow Jones)--Argentine bonds continued their downward spiral Friday as news that Ecuador had frozen debt payments rattled investors nervous about Argentina's ability to keep making payments.

Stocks, meanwhile, posted moderate gains and the peso eased slightly again against the dollar.

The Boden 2012 dollar denominated bond fell 2.15% in price terms to the dollar equivalent of ARS136.40. The Boden is yielding almost 68% after weeks of steady declines. The benchmark discount bond in pesos fell 2.38% to ARS41.

Ecuador has found itself in a tight spot due to the 62% drop in oil prices since July. Oil makes up 60% of the country's exports, Research For Traders said in a market note.

"The market associates Argentina, Venezuela and Ecuador (together), so this only adds to the problems," said Noelia Lucina of Capital Markets Argentina, who cited both global and local crises as the other factors behind "some very, very low volumes."

Ecuador matters, "even though I don't think a default will happen here," she said, "because it's a reminder that these countries have unpredictable policies.

Meanwhile, stocks fared better. After a volatile session tracking movements on Wall Street, late buying of index heavyweight Tenaris (TS) saw the day end in positive terrain, brokerage Portfolio Personal said in a market note.

The Merval index of leading shares rose 0.68% to close at 1,022.81 points.

Steele tube maker Tenaris rose 4.21% to close at ARS42.10.

The peso lost a little ground again as the Central Bank continued to intervene to slow the decline, according to Portfolio Personal.

The peso closed at ARS3.315 to the dollar, down from ARS3.3125.

-By Shane Romig, Dow Jones Newswires; 54-11-4590-2438; shane.romig@dowjones.com

(Michael Casey contributed to this report)

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November 14, 2008 15:44 ET (20:44 GMT)


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