Reuters: Regulatory News: Argentina seeks to bolster local stock, bond markets

Reuters: Regulatory News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Argentina seeks to bolster local stock, bond markets Oct 24th 2012, 23:47 Wed Oct 24, 2012 7:47pm EDT * Reform would let stock, bonds be issued without ratings * Argentine government slams Wall Street ratings agencies * Fitch warns of "pesofication" of Argentine economy By Guido Nejamkis BUENOS AIRES, Oct 24 (Reuters) - Argentina aims to increase investment in local stocks and bonds by discarding a regulation that said financial instruments issued in the country must carry a rating, Finance Secretary Adrian Cosentino said on Wednesday. The proposed reform, intended to steer investment toward Argentina's productive sector, comes as the government of the South American country stepped up its criticism of Wall Street ratings agencies that grade the soundness of investments. Argentina, which a decade ago staged the biggest sovereign debt default in history, has sought this year to combat capital flight by barring people from buying the U.S. dollars that have long served as the investment of choice for local savers. With that option now closed, Argentines are looking for a place to park their pesos, which have weakened about 9 percent so far this year to 4.75 per greenback. The bill, soon to be sent to the country's Congress, would widen options for investors forced to look for alternatives to the dollar. "We are aiming for a policy under which public offerings (of stocks and bonds) would no longer be required to be rated," Cosentino said. "The current law governing financial markets is from 1968. This reform is an attempt at modernizing the regulatory framework and make it more efficient," he added. Economy Minister Hernan Lorenzino earlier this month accused credit ratings agencies of releasing "terrorist" reports and acting like "pirates" after Moody's Investors Service said Chaco province defaulted when it recently paid dollar debts in pesos. The central bank refused to let Chaco buy dollars on the local foreign exchange market because of currency controls. So the province repaid creditors about $260,000 in pesos even though the debt had been contracted in dollars. The settlement in pesos of the dollar-denominated debt has sparked speculation of growing "pesofication," of the Argentine economy, Fitch Ratings said in a statement. "Access to the foreign exchange market has become increasingly restrictive and we believe this trend is likely to continue for the foreseeable future," it said. Leftist President Cristina Fernandez has limited access to dollars in the last year to stem capital flight but this was the first time a province was unable to buy greenbacks because of the new restrictions. Latin America's No. 3 economy expanded 8.9 percent in 2011, but that strong growth has slowed sharply this year because of sluggish global conditions, slackening demand from top trade partner Brazil and the impact of double digit inflation at home. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions