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Conservative bids ruling Peronist party adios in Argentine election

By Mary-Lynn Cesar for Kapitall

Argentines put an end to 12 years of Peronism on Sunday by handing conservative Buenos Aires mayor Mauricio Macri a decisive victory in the presidential runoff vote. Macri defeated departing President Cristina Fernández de Kirchner's chosen successor Daniel Scioli, receiving 51.4 percent of the vote while Scioli, who served as vice president under the former President Néstor Kirchner (Ms. Fernandez's late husband), scored 48.5 percent.

Mr. Kirchner and Ms. Fernandez rose to power after Argentina's 2001 default when the nation failed to make a payment on its $95 billion in debt . Back then, unemployment topped 20 percent, the country cycled through five presidents in two weeks and the economy contracted by a fifth.

The presidents' populist policies garned them support among the nation's poor while simultaneously alienating the private sector. Mr. Kirchner brought South America's third-largest economy back from the brink, and Ms. Fernandez, who took office in 2007, oversaw GDP growth for a couple of years in her first term too. However, the economy slowed down in 2013 and took a turn for the worse in 2014 when Argentina defaulted again due to Ms. Fernandez's refusal to pay Argentina's "vulture fund" creditors.

Macri is nothing like his Peronist predecesors. The pro-business president-elect, who some fear will introduce neoliberal policies, is determined to open up the Argentine economy . Macri has expressed a willingness to sit down with Argentina's international creditors and stated that he will get rid of Ms. Fernandez's controversial export taxes and corn and wheat shipment quotas.

Macri takes office on December 10. Below is a list of Argentine stocks that are rallying above their 20-day, 50-day and 200-day simple moving averages (SMA) as of 12:45PM EST Monday afternoon. This movement shows that the stocks have strong upward moment, a point supported by across-the-board bullishness in Argentine investments. Bloomberg reports that Argentina's benchmark MERVAL stock index surged 30 percent over the last three months in anticipation of a Macri win. On top of that, benchmark bond prices are rising and the country's defaulted debt is rallying.

The stocks also have low long-term debt/equity ratios , indicating that they haven't used debt to finance their growth, which typically means these stocks have lower levels of risk than those with high long-term debt/equity ratios. Considering the state of the Argentine economy and the numerous challenges it faces-the biggest budget deficit in decades, 20 percent inflation, etc.-this could be an attractive characteristic.

Click on the interactive chart to view data over time.

1. BBVA Banco Frances S.A. ( BFR , Earnings , Analysts , Financials ): Provides financial services to corporations, medium and small companies, and individuals in the Republic of Argentina. Market cap at $4.25B, most recent closing price at $24.77.

BBVA Banco Frances is rallying 2.24% above its 20-day SMA, 23.15% above its 50-day SMA and 29.45% above its 200-day SMA.

The stock's long-term debt/equity ratio is 0.03.

2. Nortel Inversora S.A. ( NTL , Earnings , Analysts , Financials ): Provides telecommunication services in Argentina and Paraguay. Market cap at $2.56B, most recent closing price at $18.92.

Nortel Inversora is rallying 2.40% above its 20-day SMA, 15.52% above its 50-day SMA and 5.53% above its 200-day SMA.

The stock's long-term debt/equity ratio is 0.07.

3. Telecom Argentina S.A. ( TEO , Earnings , Analysts , Financials ): Provides fixed-line telecommunication services and other related services in Argentina. Market cap at $3.66B, most recent closing price at $18.93.

Telecom Argentina is rallying 1.58% above its 20-day SMA, 15.48% above its 50-day SMA and 0.40% above its 200-day SMA.

The stock's long-term debt/equity ratio is 0.03.

(Monthly return data sourced from Zacks Investment Research. All otherdata sourced from FINVIZ.)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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