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Investing in Argentina and Argentina Stocks

Discusses *smart* ways of investing in Argentina, primarily thru ADRs on NYSE and NASDAQ. Covers companies like Grupo Galicia, GGAL, Banco Frances, BFR, IRSA(the biggest Real Estate Company in Argentina) IRS, Tenaris (TS), etc. UPDATED SEVERAL TIMES A MONTH.

Monday, December 26, 2005

Argentina Investment, IMF and Venezuela-Partnering with a Mad Dictator?

Off late the Argentine politicians, notably Kirchner, the President, have been trying to get close to Chavez in Venezuela. They are trying to become less "IMF dependent", so to speak, because IMF poses some strict conditions when they loan money.

If you want to loan money, it is completely fine to attach conditions to it. In getting closer to Chavez, Argentina risks alienating the US, it's biggest market, who has pretty much an anti-Chavez policy in place now. I would much rather trust the IMF than a dictator like Chavez, who is basically ruining the economy of Venezuela! Venezuela is a most amazing place, great food, good friendly people...and having a bad leader makes me feel truly sorry for those guys...

My bet is that the economy of Argentina will be alright, and these deals will become insignificant as Argentina starts to get back up on its feet again and become to Jewel of South America, as it always was. It already is doing well on Foreign Reserves, last month they stood at a respectable $29B. Argentina is paying off the IMF debt of about $9B before the end of this month, prematurely, which is a good sign. With two neighbors firing on all cylinder (Chile and Brazil), Argentines will follow thru.

Just look at the stock charts of BFR and GGAL, and compare them to Banco de Chile (BCH), the biggest private bank in Chile, and Unibanco (UBB )and Banco Itau ( ITU) , the big banks in Brazil. BFR and GGAL together are about $2B in market cap. BCH alone is $4.5B, and ITU and UBB are comibed about $40B. Even Bancolombia (CIB) of Colombia is $5B---and those guys are hardly the most trustworthy folk for investors. The Argentine banks look so cheap in comparison to them...the market is STILL writing Argentina off as a meaningless country. .Suits me just fine... I like to buy blue chips when noone is interested...Argentina will come back, give them a couple of years to sort everything out, they're coming out of the worst crisis any country has ever seen...and when they get it together, money will be made here. That's why I love Bank stocks like BFR and GGAL.

If you compare populations, PPP, etc. of Argentina, Brazil and Chile, you will realize that unless something really goes awry in Argentina again, the Banks here will catch up to their neighbors, who are minting money.

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Sanjay John G.

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2 Comments:

Anonymous said...

Thanks Sanjay. When do you think the Argentina econonmy will start to rebound. Both stocks you recommended have gone nowhere the past year, but both seem undervalued. I'll look into both of these over the weekend. Thanks.
Sperry

7:22 PM  
Anonymous said...

can you tell us about some ways that u.s. investors can invest in argentina? i seem to remember that there used to be a closed-ended fund that invested only in argentina; but, i think that fund went away when the peso to dollar peg went away. is there an etf for argentina? or are there funds in argentina that a u.s. investor can buy?

7:19 PM  

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