ARGENTINE UPDATE – Oct 27, 2015


BsAs — NYTimes Report on 36 Hours on the Town..

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1. ARGENTINE VOTE SHAKES ASSUMPTIONS ON DEPARTING PRESIDENT’S CLOUT (The New York Times)

2. REVIEW & OUTLOOK (EDITORIAL): ELECTION HOPE IN ARGENTINA (The Wall Street Journal)

3. OPPOSITION MAYOR CHALLENGES POPULISTS’ RULE IN ARGENTINA (The Wall Street Journal)

4. ARGENTINE ELECTION LEADS TO RUNOFF (Los Angeles Times)

5. ARGENTINA ELECTION: KIRCHNERS’ LEGACY AT RISK AS HEIR DANIEL SCIOLI IS FORCED INTO RUNOFF (The
Washington Times)

6. AFTER SURPRISING ELECTION, TOP 2 ARGENTINE CANDIDATES RESET (The Washington Post)

7. ARGENTINE ASSETS RALLY AHEAD OF PRESIDENTIAL RUN-OFF (Financial Times)

8. INVESTORS BET ON CHANGE IN BUENOS AIRES (Financial Times)

9. ARGENTINE BONDS SIZZLE ON SURPRISE ELECTION RESULT (Financial Times)

10. ARGENTINA’S FIRST ROUND OF VOTING PRODUCES AN UNEXPECTED RESULT (The Economist)

11. ARGENTINA’S MASSA GIVES ‘WINK’ TO MACRI AS RUN-OFF STARTING GUN FIRES (Reuters News)

12. CLOSE ARGENTINA ELECTION SPARKS A RALLY IN STOCKS (Investor’s Business Daily)

13. ARGENTINA ELECTION HEADS TO A RUNOFF AMID NEED FOR OIL INVESTMENT (Platts Commodity News)

14. ARGENTINA’S PROMISING ELECTION (Bloomberg View)

15. ARGENTINE ELECTION PUNCTURES AIR OF INVINCIBILITY OF PERONISM (Bloomberg News)

16 ARGENTINE OPPOSITION SCORES UPSET TO FORCE RUNOFF ELECTION (Bloomberg News)

17. THIS FIRST-TIME POLLSTER WAS ONLY ONE TO CALL ARGENTINE ELECTION (Bloomberg News)

18. ARGENTINE STOCKS SOAR WITH BONDS AS VOTE STOKES WAGERS ON CHANGE (Bloomberg News)

19. ARGENTINE ASSETS UP ON SURPRISE GAINS FOR PRO-BUSINESS CANDIDATE (Reuters News)

20. ARGENTINA BOND IMPASSE WILL BE HIGH ON ELECTION VICTOR’S TO-DO LIST (Reuters News)

21. ARGENTINA THUMBS NOSE AT PRESIDENT, FORCES HER APPOINTED SUCCESSOR INTO RUNOFF (Fox News)

22. SCIOLI TO FACE MACRI IN ARGENTINA’S FIRST PRESIDENTIAL RUN-OFF ELECTION (Fox News)

23. ARGENTINA STOCKS JUMP AHEAD OF UNPRECEDENTED ELECTION RUNOFF (Barron’s)

24. ARGENTINA: OPPOSITION CHALLENGER MACRI FORCES RUN-OFF IN TIGHT ELECTION (NBC News)

25. WHAT ARGENTINA’S ELECTION MEANS FOR INVESTORS (Forbes)

26. SECOND ROUND COULD BRING SURPRISES IN ARGENTINA (Oxford Analytica)

27. ARGENTINA UPDATE: HISTORIC PRESIDENTIAL RUNOFF EXPECTED AFTER TIGHT FINISH (AS-COA.org)

1. ARGENTINE VOTE SHAKES ASSUMPTIONS ON DEPARTING PRESIDENT’S CLOUT (The New York Times)
By Simon Romero and Jonathan Gilbert
27 October 2015

BUENOS AIRES — With a largely noncombative campaign that stunned Argentina by pushing the presidential race into a tightly contested runoff, Mauricio Macri, the mayor of Buenos Aires, also achieved another surprise, driving a wedge into the dominating political movement led by President Cristina Fernández de Kirchner.

In the race to succeed Mrs. Kirchner, both Mr. Macri, who is proposing economic shifts to reduce protectionism, and Daniel Scioli, a former speedboat racer endorsed by the president, scrambled on Monday to reposition their campaigns. Both need voters who opted for other candidates, opening a frenetic new phase in Argentine politics before the runoff election on Nov. 22.

Pollsters had cast Mr. Scioli as the front-runner, but momentum appeared to be shifting to Mr. Macri, especially after a rising star in his party, María Eugenia Vidal, the deputy mayor of Buenos Aires, defeated Aníbal Fernández, Mrs. Kirchner’s cabinet chief, in the governor’s race in Buenos Aires Province.

In obtaining control of the province, a coveted stronghold, Mr. Macri’s party, called Let’s Change, not only defeated one of Mrs. Kirchner’s top supporters. The result was also seen as a referendum on Mr. Scioli, the governor of Buenos Aires Province since 2007.

Political analysts paid particular attention because voting preferences in the province have historically foretold important shifts in Argentine politics.

”The candidate who has best interpreted the moment is Macri,” said Carlos Germano, an independent analyst. ”He needs to keep pointing toward dialogue and harmony,” he said, predicting that Mr. Macri would meet with leaders of the other opposition parties to solicit their support.

Mr. Scioli took 36.9 percent of the vote, compared with 34.3 percent for Mr. Macri in the first round — an unexpectedly slim margin that astounded many Argentines. Mr. Macri ran a largely nonconfrontational campaign in which he obtained high levels of support in Córdoba, Argentina’s second-largest city.

”It utterly surprised me,” Jorge Vargas, 65, who polishes floors for a living in Buenos Aires, said of the results. ”I voted for Scioli because I don’t like Macri’s background. He’s completely bourgeois.”

Still, political analysts lauded Mr. Macri’s attempts to soften his patrician image by trying to appeal to some in Peronism, the ideologically flexible political movement that has held sway in Argentina for decades. Governing Argentina for the last eight years, Mrs. Kirchner repositioned her faction of Peronism to enhance the role of the state in the economy and increase antipoverty spending, while stepping up attacks on critics.

But with his strong showing, attention shifted on Monday to Mr. Macri, 56, who was raised in one of Argentina’s wealthiest families and gained prominence as the president of Boca Juniors, one of Argentina’s most popular soccer clubs. He is running to the right of Mr. Scioli, but he has emphasized that he would seek to maintain some of Mrs. Kirchner’s policies on social spending.

Reacting to the runoff outcome, Agustín Rossi, Mrs. Kirchner’s defense minister, told reporters that the president’s supporters needed to ”be humble” in mobilizing a response to Mr. Macri’s rise. Mr. Rossi conceded that Mr. Macri had run a smooth campaign, highlighted by alluring ”sound bites,” but he said Mr. Macri could end up eroding social welfare benefits.

Mr. Macri entered politics after a harrowing episode in 1991 in which he was kidnapped by police officers and transported to a hiding place inside a coffin. Twelve days later, he was freed after his father, an Italian-born magnate, paid a multimillion-dollar ransom.

His father, Franco Macri, 85, assembled a business empire involved in construction and car manufacturing. Sometimes openly dismissive of his son’s political ambitions, Franco Macri said last year that his son had ”the brain to be president, but not the heart,” explaining that he believed Argentina’s next president had to come from the radical wing of Mrs. Kirchner’s political movement.

As mayor of Buenos Aires, Mr. Macri has remodeled public spaces, including plazas and the riverfront, and built bus lanes along major thoroughfares — achievements welcomed by voters. He has also sought to develop the poor south side of the city by encouraging technology businesses, as well as municipal government offices, to set up in the area.

Both Mr. Macri and Mr. Scioli must attract more voters, especially those who opted for Sergio Massa, a former ally of Mrs. Kirchner who took 21.3 percent of the vote, and those who supported small leftist parties.

After avoiding a debate before the first round of voting, Mr. Scioli said on Monday that he would accept a debate with Mr. Macri, reflecting how the candidate endorsed by Mrs. Kirchner now finds himself on the defensive. Both candidates have avoided the president’s belligerent tone in favor of a more mollifying approach.

In reaction to a potential shift if Mr. Macri’s momentum builds, Argentine stocks surged on Monday. But analysts said such sentiment failed to reflect the possibility of a bruising runoff campaign. Moreover, Mr. Macri recognizes that he must attract supporters of Mr. Scioli, a challenging aim in what remains a highly polarized society.

”For days, Macri has been working on this fissure, probing the Peronists from within,” Carlos Pagni, a political columnist, wrote in the newspaper La Nación.

Some voters were perplexed by the runoff. ”Scioli’s no good; he’s under Cristina’s thumb,” said Mary Dany Correa, 82, a retired civil servant who voted for Mr. Massa. ”Macri’s done good things in the city, but I don’t see him as capable of running the whole country. There are a lot of things to fix.”

But Mr. Macri’s showing uplifted many supporters who want a change after 12 years of Mrs. Kirchner and her predecessor, her late husband, Nestor Kirchner.

Santiago Elizalde, 27, an information technology salesman who voted for Mr. Macri, said that while he was ecstatic that his candidate had upended the race, ”it’s a match he still has to play.”

2. REVIEW & OUTLOOK (EDITORIAL): ELECTION HOPE IN ARGENTINA (The Wall Street Journal)
27 October 2015

Argentina voters are tired of sinking living standards and shrinking freedoms. At least that’s the hopeful reading of Sunday’s presidential election in which more than 60% of voters failed to pull the lever for the candidate backed by President Cristina Kirchner.

Mrs. Kirchner is barred from running for a third four-year term, so her Peronist Front for Victory party backed Buenos Aires province governor Daniel Scioli. He won only 36.5% of the vote while Buenos Aires city mayor Mauricio Macri surprised pollsters with 34.7%. Sergio Massa, a Peronist member of the lower house, finished third with 21%. Mr. Massa hasn’t said who he will back in the Nov. 22 runoff, but he also campaigned on the need for a change.

Argentina is a mess. The Kirchners — Cristina for eight years and her late husband Nestor for four before that — have promoted socialist economics and protectionism. They politicized the judiciary, seized private property and stiffed international creditors. Inflation is running at 25% by private estimates, and capital is fleeing the country. The central bank may run out of reserves by the end of the year. Mr. Macri has said he’ll lift exchange controls while ending the country’s trade and financial isolation.

The clearest sign that more Argentines are coming out of their populist trance was the result in the race for governor in the wealthy province of Buenos Aires, a Kirchner stronghold where one in every four Argentines lives. Peronists have held the province for 28 years. But on Sunday 42-year-old Maria Eugenia Vidal, a member of Mr. Macri’s Cambiemos coalition, handily defeated Mrs. Kirchner’s candidate.

That bodes well for Mr. Macri if the presidential runoff is fair, which is never a sure thing in Peronist Argentina.

3. OPPOSITION MAYOR CHALLENGES POPULISTS’ RULE IN ARGENTINA (The Wall Street Journal)
By Taos Turner and Juan Forero
27 October 2015

BUENOS AIRES — Until Mauricio Macri stunned Argentina’s political establishment on Sunday by triggering a second round of presidential voting, many of his compatriots saw him as a wealthy heir unconnected to the problems of ordinary Argentines.

But as the votes were tallied on Monday, it emerged that the 56-year-old mayor of Buenos Aires had marshaled a far larger percentage of votes than polls had forecast for Sunday’s first round. Now Mr. Macri, the son of an Italian immigrant who grew rich and influential here, will challenge the ruling Peronist movement’s candidate, Daniel Scioli, in a runoff that could truncate the populist party’s plans to extend its 12-year rule.

“The truth is that Macri rules,” said Leon Luna, 37, who as a municipal truck driver is the kind of voter Peronists have wooed for decades.

Polls ahead of Sunday’s vote suggested that Mr. Scioli, a 58-year-old ally of President Cristina Kirchner and the governor of Buenos Aires province, would come close to achieving the result needed to win outright: 40% of the vote and a 10-point lead over Mr. Macri. But by Monday, with 97% of the votes counted, Mr. Macri had 34.3% of the vote, and Mr. Scioli getting just over two points more than that.

Observers say Mr. Macri upended the race by highlighting what his campaign called his efficiency in running this vast city, rather than focusing on his personality. Mr. Scioli, who was vague about how he would govern and didn’t attend a presidential debate, was rejected by 63% of voters.

“Macri has created a party infrastructure with a diverse membership base that tried to get out of the center-right corset,” said Juan Cruz Diaz, managing director of Cefeidas, a risk advisory firm. “He was able to capture the imagination of Argentines this way.”

Many people who voted for Mr. Macri said they believed him to be the best candidate to undertake the overhauls economists say are needed to correct an economy whipsawed by high inflation and fast-depleting foreign-currency reserves.

“Argentina needs change and we’re going to bring change,” Mr. Macri told supporters on Monday morning.

Between now and Nov. 22, Mr. Macri and Mr. Scioli will be vying for the 21% of the vote that went to third-place Sergio Massa, a dissident Peronist now thrust into the role of kingmaker.

Mr. Massa, 43 years old, was once cabinet chief to Mrs. Kirchner but hasn’t said whom he would support. A spokesman said senior members of his coalition would meet this week to discuss a strategy.

A poll conducted a month ago by Consultora Wonder showed that 71% of Mr. Massa’s voters would go for Mr. Macri. A key reason, said Carolina Yellati, the firm’s director, is that Mr. Massa’s supporters generally oppose Mrs. Kirchner’s government.

On Monday, Mr. Scioli, who ran a cautious and civil campaign, came out aggressively, telling prospective voters that Mr. Macri would end the country’s bountiful social programs if elected. “I know very well what we want to care for, what we want to protect,” he told supporters Monday.

Leandro Maturana, a unionized government worker and die-hard Peronist, believes the message. “Macri is a businessman who will take away the subsidies and cut the budget, to make an adjustment against Peronist people,” he said.

Mr. Macri has spent much of his life in the boardroom, moving up in his father’s construction company before becoming an executive at a car manufacturer.

Before becoming mayor of Buenos Aires, he was president of Boca Juniors, a beloved soccer club that plays in a working-class district long home to immigrants.

4. ARGENTINE ELECTION LEADS TO RUNOFF (Los Angeles Times)
By Andres D’Alessandro, Chris Kraul
27 October 2015

The presidential race is surprisingly close as Buenos Aires’ mayor forces next round with ruling party candidate.

In a much-closer first round of presidential voting than expected, the mayor of Buenos Aires, Mauricio Macri, forced a Nov. 22 runoff with Daniel Scioli, the ruling party candidate who has been favored to become Argentina’s next president.

With nearly all votes counted, Scioli, who is governor of Buenos Aires state and a former vice president, tallied 36.9% of the ballots cast. Macri was close behind with 34.3%.

Scioli, the handpicked choice of outgoing President Cristina Fernandez de Kirchner, needed at least 40% and a 10-percentage-point advantage to avoid a second round of voting.

When it became clear he would not win outright, Scioli emerged from his campaign headquarters in Buenos Aires on Sunday night to ask for independent voters’ support.

Macri was euphoric. “What happened today has changed the political history of the country,” he told supporters.

An engineer by training, Macri is a centrist technocrat who has promised to make Argentina function more efficiently by building better public transportation, schools and hospitals. He said he would digitize the bureaucracy and bring down costs.

The two will face off in the first presidential runoff in Argentine history. The third-place finisher, congressman Sergio Massa, who garnered 21.3% of votes, could play kingmaker if he throws his support behind either candidate.

Massa gave no indication of whether he would endorse either candidate, saying only that he would release a document in the coming days with his proposals for the next president.

One reflection of the disappointing results for the president was that Anibal Fernandez, her Cabinet chief and handpicked candidate to replace Scioli as Buenos Aires state governor, lost by 5 percentage points to Macri ally Maria Eugenia Vidal.

The loss marks the first election since 1987 that a Peronist — the name given to followers of late Argentine President Juan Peron and his second wife, Eva Peron — has not won the governorship of the country’s most populous state.

Argentines turned out in big numbers — 79% of the 32 million eligible voters cast ballots — to decide Sunday’s election. The voting was widely seen as a referendum on the presidencies of Fernandez and her late husband, Nestor Kirchner. Between them, they have led Argentina since 2003.

Although many young and lower-middle-class voters favor the president’s support for human rights and a social safety net, others expressed dissatisfaction with a 28% inflation rate and a stagnant economy that last year shrank 2% in terms of the value of total goods and services produced.

Cold but mostly sunny weather nationwide boosted the turnout, election officials said. Many voters cast their ballots early Sunday to return home in time to watch Argentina’s national rugby team lose to Australia in the televised semifinals game of the world championship in London.

Scioli, who ran on the Victory Front ticket, promised to continue the president’s social welfare policies with some changes, including a harder line on rising crime. He also called for economic reforms, including the settling of a decade-old bond default.

“I voted for Scioli because I understand he will maintain the project that Nestor and Cristina began,” 30-year-old graphic designer Emilio Ferreyra said after voting in the capital. “It’s a way of staving off the right wing.”

After voting in Dique Lujan in Buenos Aires state, Scioli had declined to predict an outcome.

The election may mark the end of national power of “Kirchnerismo,” but the family will remain a local force at least. The couple’s son, Maximo, was elected to a national congressional seat for Santa Cruz state, and Nestor Kirchner’s sister, Alicia, was elected Santa Cruz governor.

Though many voters expressed support for Fernandez’s wealth-redistribution programs and prosecution of those implicated in atrocities committed during the 1976-83 dictatorship, it was clear many were tired of her heavy hand in the nation’s economy.

“I voted for Macri because in the last few years the country hasn’t grown economically or socially,” said Karina Cunibertti, 46, an insurance company employee in Buenos Aires. “Macri represents the possibility of change. I hope he wins the runoff and reestablishes the good functioning of the government and brings about real opportunity for all.”

5. ARGENTINA ELECTION: KIRCHNERS’ LEGACY AT RISK AS HEIR DANIEL SCIOLI IS FORCED INTO RUNOFF (The Washington Times)
By Andre F. Radzischewski
27 October 2015

BUENOS AIRES — The stunning virtual tie in Sunday’s presidential election here suggests the populist ruling coalition founded by Cristina Kirchner and her late husband and predecessor, Nestor Kirchner, may see its long grip on power crumble when the term-limited incumbent leaves the Casa Rosada, Argentina’s White House, on Dec. 10.

Pollsters had widely expected Argentines to hand the presidency to Daniel Scioli, the governor of Buenos Aires province and Ms. Fernandez’s handpicked heir, effectively extending the Kirchners’ 12-year reign. Instead, the unexpectedly strong showing of their longtime nemesis, pro-business Buenos Aires Mayor Mauricio Macri, has forced a runoff and fueled what one commentator called a “social revolution against Kirchnerism” that could well lead to a long, unheard-of center-right victory in South America.

“These results are a very positive outcome for Macri and a big disappointment for Scioli,” Credit Suisse economist Casey Reckman wrote in a note to clients Monday. Given the way he won the expectations game, Mr. Macri “will likely have stronger momentum going in to the next month of campaigning thanks to yesterday’s outcome.”

Sunday’s result may even reverberate beyond Argentina’s borders as other leftist leaders in the hemisphere, such as Brazilian President Dilma Rousseff and Venezuela’s President Eduardo Maduro, are increasingly coming under fire and seeing their power threatened for the first time in years.

“People are tired of this kind of populism” often linked to a high level of corruption, said Marcelo Camusso, who heads the political science department at the Catholic University of Argentina.

The most important figure in Argentina’s Nov. 22 runoff, though, may not be Mr. Macri nor Mr. Scioli, but Sergio Massa — Sunday’s third-place finisher — who for now seems to hold the keys to the presidential palace.

Like Mr. Scioli, Mr. Massa forms part of the larger Peronist movement and once served as Cabinet chief early on in Ms. Fernandez’ administration. But the mayor of a Buenos Aires suburb has since turned into a vociferous critic of the incumbent, accusing her of unjust tax policies, widespread corruption and a failure to rein in violent crime and drug traffickers.

Wooing Massa

That mixed political heritage meant that both Mr. Macri and Mr. Scioli on Monday immediately laid claim to the 21 percent of votes Mr. Massa had captured in Sunday’s first round. “I feel that they think the same as us here,” Mr. Macri said about Mr. Massa’s supporters. “He also took a position for change.”

Massa backers were “much farther away from Macri than from us,” Mr. Scioli countered hours later. But for the Fernandez heir, reaching out too far to the Peronist “dissident” would invariably force a break with the Kirchnerist orthodoxy, a dangerous game that cuts into his own base, said Mariano de Vedia, a political commentator for the La Nacion daily.

“Scioli appears very weakened. It is unlikely that he can improve his performance” Mr. de Vedia said. “He faces a dilemma; I do not think he is capable” of breaking with Ms. Fernandez.

The governor himself seemed to acknowledge his conundrum Monday as he tried to shift attention to a proposed televised debate with Mr. Macri, an encounter he had previously ruled out by arguing that his positions were well known. The Buenos Aires mayor almost immediately took his rival up on the challenge, and his Cambiemos (“Let’s Change”) coalition said Mr. Macri had never shied away from such a debate.

Mr. Scioli’s change of heart, meanwhile, came after Vice Mayor Maria Eugenia Vidal, Mr. Macri’s second in command in the capital, was confirmed to have won the gubernatorial election in Buenos Aires to succeed Mr. Scioli — the first non-Peronist governor there since 1987.

“This was a truly historic event [that] will produce an enormous change in Argentine politics,” Mr. Camusso predicted.

Critics had repeatedly accused Ms. Vidal’s challenger, none other than Ms. Fernandez’s Cabinet chief, Anibal Fernandez, of ties to organized crime, and the unpopular hard-liner’s nomination may have been too much even for the president’s backers. Mr. Camusso said the message to Ms. Fernandez was: “We follow you, but we are not going to follow you anywhere.”

Mr. Massa, meanwhile, has so far kept mum on which candidate — if any — he might endorse in the coming runoff.

“In three weeks Argentines will have to choose a new path,” he told the crowd at his election night rally. “We know the role we play. In the next hours we will get together [to announce] what we are going to do.”

But how he aligns his loyalties may depend less on ideology and more on his personal ambitions, said Joaquin Morales Sola, a prominent columnist with La Nacion. Mr. Massa stands to emerge as the unchallenged leader of the Peronist movement if Mr. Scioli — and, by extension, Ms. Fernandez — were to lose in November.

“It is in Massa’s interest that Macri be president,” Mr. Morales Sola said.

“Massa can be an important guide for a disoriented and beaten Peronism,” Mr. Camusso agreed.

Not all of his backers may comply with a likely Massa endorsement, Mr. Morales Sola said. Still, the vast majority of Argentines, who in 2011 reelected Ms. Fernandez with 54 percent of votes, this time preferred opposition candidates. “I don’t know where [Mr. Scioli] is going to get [that] 15 percent he needs to win the runoff,” he said. “To me, he is in a very complicated situation.”

Argentina’s long-suffering investors, meanwhile, seemed delighted with the prospect of a Macri victory. The Argentine Business Association praised the vote and — in thinly veiled criticism of Ms. Fernandez’ autocratic style — called on leaders to “deepen the dialogue between all stakeholders” so as to propel “the social and economic development of our country.”

6. AFTER SURPRISING ELECTION, TOP 2 ARGENTINE CANDIDATES RESET (The Washington Post)
By Peter Prengaman
October 26, 2015

BUENOS AIRES, Argentina — The top two presidential candidates in Argentina reset their campaigns on Monday after a razor-close election vote forced a runoff and cast doubt on the legacy of President Cristina Fernandez, a polarizing leader who spent heavily on programs for the poor but made enemies with her brash style and failure to solve economic ills.

Sunday’s presidential election shook up the political landscape. Numerous polls in recent months had projected that ruling party candidate Daniel Scioli would win by 10 percent or more.

Scioli, the governor of the Buenos Aires province, had been viewed as an easy front-runner thanks to the support of Fernandez, a charismatic two-term president. Fernandez won admirers for rewriting the South American country’s social contract but also drew sharp criticism for widespread allegations of corruption in her administration and for fights with political opponents and other nations that many Argentines found tiresome.

With 97 percent of polling places reporting Monday, Scioli had 36.9 percent of the vote, while opposition candidate Mauricio Macri had 34.3 percent.

That forces a second round, since to win in the first round a candidate needs 45 percent or 40 percent and a 10-point advantage over the nearest competitor.

“A runoff will be like reshuffling the cards and dealing again,” said Mariel Fornoni, director of consulting firm Management & Fit. “The political landscape will be very different on Nov. 22”

Scioli reminded supporters on Monday that he captured the most votes, and warned that Macri would undo popular state programs.

“Sometimes the word ‘change’ can be attractive in politics,” said Scioli, arguing that the state should continue to have a strong hand in Argentine society.

Scioli also invited Macri to a debate, an about-face after refusing to debate the other five candidates a few weeks ago.

Macri called the vote “transformative,” and promised to convince voters who didn’t choose him on Sunday.

“We will correct the abuses and the fraud of inflation,” Macri said, reiterating one of his common themes.

Many Argentines are worried about high government spending and inflation around 30 percent. Many have also grown tired of a legal fight with creditors in the U.S. that has kept the country out of international credit markets.

Macri presented himself as the man to put Argentina’s economy in order, promising to resolve the debt fight and lift unpopular currency restrictions.

But he also tailored his campaign to the millions who receive some form of government support. He promised to maintain popular programs for the poor and increase spending in some areas.

He even inaugurated a statue of Juan Peron, a three-time former president who founded the ideological movement to which Fernandez adheres.

Scioli, a former boat racer who lost his right arm in an accident, presented himself as the continuation of Fernandez’s policies but who would also fix anything broken.

Both candidates’ decision to straddle the center also led to many questions about what they would really do in office.

“I think this election was an expression of widespread fatigue” with the current government, said Jorge Neimark, an 85-year-old retired lawyer. “Even if Macri didn’t represent any ideology, he does represent a change.”

Over the next month, both candidates will be heavily courting Sergio Massa. The former Fernandez loyalist came in third on Sunday, garnering 21.3 percent of the vote.

On Monday, analysts, pundits and ordinary Argentines were debating theories on why the polls were so far off. A popular mashup video on Twitter showed reality television personality and U.S. presidential candidate Donald Trump in the board room of his show “The Apprentice.”

With a headline addressed to Argentine pollsters, Trump is seen doing his signature “You are fired!”

7. ARGENTINE ASSETS RALLY AHEAD OF PRESIDENTIAL RUN-OFF (Financial Times)
By Benedict Mander
October 26, 2015

Argentine assets rallied strongly on Monday after Mauricio Macri, the reformist mayor of Buenos Aires, raised investor hopes that the ruling Peronist party would soon be ousted from power after an unexpectedly strong showing in presidential elections on Sunday.

With an end in sight for 12 years of populist rule by President Cristina Fernández de Kirchner and her late husband and predecessor Néstor Kirchner, optimism is running high that centre-right Mr Macri could beat Daniel Scioli, the government-backed candidate, in a run-off vote next month.

Polls in the run-up to the vote had shown Ms Fernández’s anointed successor with as much as a 10-point lead over his more market-friendly rival; however Mr Scioli only won 36.9 per cent of the vote, while Mr Macri gained 34.3 per cent, with 97 per cent of votes counted.

Because of Argentina’s unique electoral rules, Mr Scioli needed 45 per cent of the vote, or 40 per cent plus a 10-point lead over Mr Macri, to win outright. The two contestants will now face off in a second vote on November 22.

Mr Macri’s stunning performance has boosted investor hopes that Argentina will break from Peronism, whose dominance of Argentine politics over the last 70 years has coincided with the nation’s downfall from one of the richest in the world to one of Latin America’s most troubled economies.

Prices for Argentina’s dollar bonds due 2017 jumped more than 10 per cent to 111.50 cents on the dollar on Monday. Yields on the bonds plummeted from 7.46 per cent to just under 1 per cent, before rising to 1.83 per cent. Investors also bid up the bonds due 2033 to an eight-year high of 110 cents on the dollar.

Andrew Stanners, an investment manager at Aberdeen Asset Management, described the result as “a welcome surprise”. “Macri is the candidate who is most keen to get on and reform Argentina’s economy. Those reforms will be pretty painful but it’s encouraging that the country seems to be realising that they are desperately needed by voting for him,” he said.

Mr Macri would move fast to fix serious macroeconomic imbalances, which include a ballooning fiscal deficit financed by the central bank, precariously low foreign exchange reserves and one of the highest inflation rates in the world.

The former president of the Boca Juniors football club has pledged to remove strict capital controls immediately and allow the overvalued peso currency to float freely. He would also tighten fiscal policy by cutting back on costly subsidies and attempt to resolve a long-running creditor dispute that has blocked Argentina’s access to the international capital markets since a $100bn sovereign debt default in 2001.

8. INVESTORS BET ON CHANGE IN BUENOS AIRES (Financial Times)
By Benedict Mander
October 26, 2015

Branded an international financial pariah since what was then the biggest sovereign debt default in history in 2001, investors are optimistic that Argentina will soon come in from the cold.

A stunning performance in presidential elections on Sunday by Mauricio Macri, the centre-right mayor of Buenos Aires who campaigned for change, has raised hopes that he could clinch a victory in a run-off vote on November 22. The prospect of a break from rule by Argentina’s dominant Peronist party sent bond prices soaring on Monday.

“‘Macrinomics’ is now a distinct possibility. This would be a positive for the country,” said Edward Glossop, emerging markets economist at Capital Economics in London. “It’s clear that the tide is turning in Argentina and disillusionment with interventionist and populist policies is growing,” he added.

Markets see whoever wins the run-off vote — Mr Macri is set to face off against the government-backed Daniel Scioli, the moderate Peronist governor of the province of Buenos Aires — as an improvement on the last 12 years of rule by President Cristina Fernández and her late husband and predecessor, Néstor Kirchner.

But Mr Macri, who some pollsters had predicted would not win enough votes to make it to the second round, has promised to move much faster to fix serious macroeconomic imbalances, which include a ballooning fiscal deficit financed by the central bank, precariously low foreign exchange reserves and one of the highest inflation rates in the world.

“A Scioli victory in the first round would not have been bad, but a Macri victory in the second round would make this an economic normalisation trade, not just an ‘anybody but Cristina’ trade,” says Daniel Freifeld, principal of Callaway Capital Management, an investment firm.

“Equity valuations and yields should converge with regional averages, which will translate into significant gains,” he added.

Mr Macri has pledged to remove strict capital controls immediately and allow the overvalued peso to float freely. The former president of the Boca Juniors football club would also tighten fiscal policy by cutting back on costly subsidies and attempt to resolve a long-running creditor dispute that has blocked Argentina’s access to the international capital markets since its $100bn sovereign debt default.

Meanwhile Mr Scioli has promised to implement more “gradual” reforms, and warns that Mr Macri would represent a return to the neoliberal economic policies of the 1
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2 comentarios to “ARGENTINE UPDATE – Oct 27, 2015”

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