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Argentina oil company YPF spikes 40% as investors cheer president-elect Milei's promises to revamp the economy

Javier Milei
Presidential candidate of the Liberty Advances coalition Javier Milei arrives to vote in the presidential runoff election in Buenos Aires, Argentina, Sunday, Nov. 19, 2023.(AP Photo/Matias Delacroix)
  • Shares of state-oil firm YPF soared 40% on Monday after Javier Milei's presidential victory.

  • Milei has promised to revamp the Argentine economy, and also said he would seek to privatize YPF.

  • Milei won the Argentine presidential election Sunday against Economy Minister Sergio Massa.

Argentine state energy company YPF saw its New York-listed shares spike more than 40% on Monday, following Javier Milei's presidential election victory on Sunday.

Around 2:00 p.m. EST, the stock hovered at $14.90, up 38.82% on the day.

Right wing libertarian candidate Milei, who beat out Economy Minister Sergio Massa by a wider-than-expected margin, has promised to revamp the ailing Argentine economy largely through promoting the local use of the US dollar, and said he would consider a sale of YPF and other state-controlled firms to boost public accounts.

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The president-elect said in a radio interview, per Reuters, his administration will "create value" for companies in order for them to "be sold in a very beneficial way for Argentines." The country nationalized 51% of YPF more than a decade ago, seizing control from Spain's Repsol, and the energy company now oversees massive shale gas and oil reserves.

YPF wasn't alone in its rally on Monday. Other Argentina-linked equities saw gains too, as did Argentina's dollar bonds.

Shares of both Grupo Financiero Galicia and Banco Macro climbed more than 20%, and the Global X MSCI Argentina ETF was up more than 11.6% shortly after midday in New York.

"The model of decadence has come to an end, there's no going back," Milei said in a post-election speech.

Investors and markets will be monitoring the exchange rate between the peso and the dollar, as Milei's bold economic plan includes deprioritizing the local currency in favor of the greenback in a bid to tame historic inflation.

Read the original article on Business Insider