Argentine stocks dipped slightly on Friday as Argentina launched its historic debt swap after three years in default, but losses were cut late in the day after all the local pension funds signed up for the deal. The MerVal index of the 12 leading stocks lost 0.19 percent to 1,344.70 points, to put the loss for the month at 2.2 percent. Volume was thin but slightly higher than Thursday at 41.8 pesos ($14 million).
"There's caution among investors, underlined by the low volume and scarce buy orders, because of a little uncertainty over the debt swap," said Oscar Campos, trader at brokerage Intervalores.
The Argentine government began to swap $102.6 billion in old debt held by more than 500,000 investors for $41.8 billion in new bonds. The deadline for the swap is February 25 and the government said there will be no new offers.
The local pensions funds holding 17 percent of debt issued a statement on Friday afternoon saying they had signed up, as they had agreed with the government months ago. Analysts predict the acceptance rate could be around 70 percent, which might be enough for Argentina to end its default.
"All eyes are on signs from the international roadshow for the debt swap," said Rafael Ber of Argentine Research. Argentine officials will be in Europe, the United States and Asia for the next two weeks. Among the biggest losers was Grupo Financiero Galicia, which accounts for 25 percent of the index. It lost 1.2 percent to 2.45 pesos.
The foreign exchange market also remained focused on the debt swap and the peso continued to firm against the dollar although it only closed 0.08 percent stronger at 2.955/2.96. A week ago, the peso traded at 2.975/2.98 per dollar.
The Central Bank bought $29 million on Friday to keep the peso from firming further.