Javier Miley’s landslide victory in the Argentine presidential election has sparked a surge in the stock market, with shares in state oil company IPF jumping 40 percent on Monday. The news sent the stock up 38.82% at $14.90 just before 2:00 PM EST.
If Miley’s plans go ahead, there could be major economic changes in Argentina. Miley wants to revive the country’s economy by using the US dollar and eventually selling state-owned companies such as IPF. In a radio interview, he mentioned that his administration’s goal is to add value to companies in order to increase their sales and benefit the people of Argentina. The government nationalized 51% of IPF more than a decade ago, taking control from Spain’s Repsol. They now manage significant reserves of shale gas and oil.
Argentine stocks and dollar bonds performed well on Monday, likely in response to Miley’s victory. Not only did IPF see its share price rise, but other stocks linked to Argentina, such as Grupo Financiero Galicia and Banco Macro, also gained over 20% in value. The Global X MSCI Argentina ETF also posted gains, surging over 11.6% shortly after midday in New York.
Miley described his election victory as the defeat of the decadent model, claiming that there is no going back. In order to manage Argentina’s historic inflation, a plan was put in place to devalue the peso relative to the dollar. The expectation of this new economic era is expected to affect the exchange rate between the peso and the dollar.