Merval Soars After Midterm Elections
2025-10-27 15:07
By
Felipe Alarcon
1 min. read
Argentina's Merval index surged to above the 2,500,000 level, returning to its February highs after the October 26th midterms delivered roughly 41% of the vote to President Milei’s coalition and materially improved his legislative leverage, raising the probability of credible fiscal consolidation, privatizations and deregulation and thereby reducing the yield premium on Argentine risk.
At the same time a reported US support package that includes a signed $20 billion currency swap and complementary financing provided immediate external liquidity, tightened sovereign spreads and eased rollover pressures, allowing dealers and international funds to redeploy capital into large, liquid domestic names.
Those twin effects raised the present value of regulated cash flow sectors and banking franchises and triggered rotation into energy, utilities and lenders, a move reinforced by analyst upgrades and higher bank earnings and credit growth forecasts.