MSCI’s Argentine stock index soars more than 17% after Javier Milei’s victory

So far this year, this index has risen just 4.72% in one year, while this ETF had the best performance and return of equity in the world during 2024. It is worth remembering that that year, with the victory of Javier Milei as president, it achieved a total return of 63.5% in dollars, leading the podium.

Among the stocks that are included in this ETF are Mercado Libre, YPF SA, Grupo Financiero Galicia, Vista Oil&Gas, Pampa Energía, Banco Macro and Transportadora Gas del Sur.

The key to US aid

Several factors converged behind this result, for the market. On the one hand, the rejection of Kirchnerismenhanced by the lack of renewal in their leadership. Also influenced by helpful vote of independent sectors that, in the face of opposition fragmentation, chose to reinforce the ruling party to guarantee governability.

But, without a doubt, the US financial aid It was decisive, especially in the last two weeks. Washington’s support was not limited to rhetoric: it included the currency swap for up to US$20,000 millionhe maintenance of liquidity lines and coordination with the North American Treasury that gave air to the Central Bank to maintain parity within the band scheme. In practice, that external support was the containment network which prevented the exchange rate pressure from leading to a major crisis during the campaign.

The warnings of donald trumpwho had pointed out that “if Milei lost, the US was not going to be generous with Argentina”, had been interpreted as a direct signal that the continuity of North American support depended on the electoral result. That political and economic support worked like trust anchor for investors, it allowed sustaining the exchange band regime and prevented the dollar from skyrocketing in the middle of a lawsuit for unpublished coverage. “Washington’s support was decisive: it allowed the market to reach Sunday alive,” they agreed at a money table.

The economist Aldo Abramexecutive director of Freedom and Progressconsidered that the results “They reflect great support for the change of course towards normality that the Government is leading”. In his view, the market had operated for weeks under a scenario of doubt about whether or not society would endorse this correction process, and the vote cleared up the mystery. “There was a bet on uncertainty: savers sold Argentine assets, dollarized portfolios and fled from local risk. This result reverses that dynamic; now the savings that were gone can begin to return, the dollar is going to give way and local assets are going to recover value,” Abram explained, highlighting that political validation reinforces the conditions for a faster economic recovery.

In the same line, Martin PoloHead of Strategy Cohen Financial Alliesinterpreted the result as “a positive black swan”capable of causing a profound change in financial mood. “The market was very loaded with pessimism, with bond and stock prices that discounted an adverse scenario. This result not only improves governability, but also gives the Government time to consolidate its program without any problems. In the short term, a stage of relief and euphoria is coming; in the medium term, the possibility of a more stable cycle if fiscal discipline is maintained,” analyzed the strategist, who defined the moment as “a honeymoon between the Government and the markets”.

Added to this was the change of tone by Javier Mileiwhich in recent months he moderated his speechshowed greater openness to dialogue -something that he reflected again in his post-election message. and projected a image of more pragmatic leadershipwhich expanded its electoral base and reinforced the perception of institutional stability.