On Monday, shares of state-oil firm YPF surged 40% after Javier Milei won the presidential election and defeated Economy Minister Sergio Massa. Milei has ambitious economic revamp plans for the country, including privatizing YPF. This news caused the stock to soar to 38.82% at a price of $14.90 just before 2:00 p.m. EST.
If Milei’s plans are implemented, there could be major economic changes in Argentina. Milei wants to rejuvenate the economy by utilizing the US dollar and possibly selling off state-owned companies such as YPF. He stated in a radio interview that his administration’s goal is to increase the value of companies, making them more sellable and beneficial to the people of Argentina. The government nationalized 51% of YPF over ten years ago, taking control from Spain’s Repsol. They now manage substantial shale gas and oil reserves.
Argentine stocks and dollar bonds all performed well on Monday in response to Milei’s sweeping victory. In addition to YPF, other Argentina-linked equities such as Grupo Financiero Galicia and Banco Macro also gained over 20% in value. The Global X MSCI Argentina ETF also saw gains, going over 11.6% soon after midday in New York.
Milei described his election win as the defeat of a decadent model, asserting that there is no turning back. To manage Argentina’s historic inflation, a plan is set to prioritize the peso over the dollar. The anticipation of this new economic era is expected to impact the exchange rate between the peso and the dollar.