On Monday, the shares of YPF state-oil firm jumped 40% after Javier Milei won the presidential election and defeated Economy Minister Sergio Massa. This news prompted the stock to soar to 38.82% at a price of $14.90 just before 2:00 p.m. EST.
Milei has big economic revamp plans for the country, including privatizing YPF, which could lead to major economic changes in Argentina if they take off. He wants to revive the economy by using the US dollar and possibly selling off state-run companies such as YPF, with his administration’s aim being to add value to these companies and increase their saleability to benefit the people of Argentina. The government had nationalized 51% of YPF over ten years ago, taking control from Spain’s Repsol. They now manage substantial shale gas and oil reserves.
The anticipation of this new economic era is expected to impact exchange rates between currencies, with some analysts predicting a drop in inflation due to Milei’s plans to deprioritize the peso over the dollar in managing Argentina’s historic inflation rates.
Argentine stocks and dollar bonds all performed well on Monday in response to Milei’s sweeping victory, with other Argentina-linked equities such as Grupo Financiero Galicia and Banco Macro gaining over 20%, while the Global X MSCI Argentina ETF saw gains as well, going over 11.6% soon after midday in New York. Milei described his election win as a defeat of a decadent model, asserting that there is no turning back from this new era that he intends to lead.
In summary, Javier Milei’s victory in the presidential election is expected to bring significant changes to Argentina’s economy if his plans come into fruition, particularly regarding privatization and use of foreign currency exchange rates management methods for inflation control purposes.