According to Sino-Singapore Jingwei news on November 22, on Tuesday local time, Argentina’s benchmark stock index MERVAL closed up 22.84%. Previously, Argentina held the second round of presidential elections. According to the official final vote count, Congressman Javier Millay, candidate of the far-right electoral alliance "Freedom Forward Party" and congressman, was elected as Argentina's new president.
The day before, the share prices of Argentine companies listed in the United States rose. As Milai publicly stated after his election victory that he would seek to increase the value of state-owned energy company YPF in order to privatize it, the ADR share price of Argentina's largest state-owned oil company soared 43%, the highest increase since records began in 1993. Argentina's two largest private banks, Banco Macro SA and Grupo Financiero Galicia SA, surged 20% and 17% respectively. The GlobalXMSCI Argentina ETF posted a record gain of 12%.
According to a report by the Securities Times on the 21st, an institutional investor told the media: "Millay correctly emphasized that there is no room for incrementalism and that we need to vigorously change the course of this country."
In addition, Argentina’s government bonds maturing in 2030, 2041 and 2046 all rose by at least 1.9 cents.
At the same time, Argentina faces being replaced by the US dollar. On the Argentine black market, the peso exchange rate has fallen to about 1,000 pesos per U.S. dollar. The price fell 8% from Friday's price of about 920 pesos local time. Argentina's economy continues to stagnate, with the peso devaluing more than 90% in the past four years.
Argentina’s inflation and benchmark interest rate trends (2018 to present)
According to CCTV News on November 20, Argentina will hold the second round of presidential elections on November 19, local time. According to the official final vote count, Congressman Javier Milay, candidate of the far-right electoral alliance "Freedom Forward Party" and congressman, was elected as the new president of Argentina with 55.95% of the vote. Later, his rival Sergio Massa, candidate of the center-left ruling coalition Fatherland and current Economy Minister, gave a speech and admitted that he had failed in the election.
According to Reference News Network on November 20, citing an Agence France-Presse report on November 20, former US President Trump congratulated Javier Milay on his election as the President of Argentina on his "Real Social" website on the 19th, believing that the latter would "change" Argentina.
Millais, 52, is an economist by training and the founder and main leader of Argentina's "Freedom and Progress Party".
The Argentine presidential election has attracted widespread attention from the outside world. One of the important reasons is the candidacy of extreme right-wing politician Milley. With Argentina's inflation rate already at 142.7% and the country's economic growth severely slowing for years, Milley advocated full dollarization. According to a reference news report on August 15, Milley's campaign promise was to "blow up" the Argentine Central Bank and also proposed drastic cuts in taxes and public spending.
In addition, Milley has caused controversy because of his support for the legalization of organ sales, the implementation of loose gun control policies, and the prohibition of legal abortion. Because he has some things in common with former U.S. President Trump, such as his love of social media and his often surprising remarks, Milley was dubbed the "Argentine Trump."
According to a report by China News Weekly on the 21st, Carlos Gervasoni, a political science professor at the University of Torquato di Tela in Buenos Aires, said that Milley will be "completely weak in Congress." He further stated that the Free Progress Party only holds 7 of the 72 seats in the Argentine Senate and 38 of the 257 seats in the House of Representatives. Carlos Gervasoni believes that this means that many of Millay's ideas cannot be realized.
Milley also faces a divided legislature that would limit his ability to achieve the vision of his campaign. Felipe Campante, an expert on Latin American politics at Johns Hopkins University in the United States, believes that due to Mire's weak political support and difficult domestic economic situation, the risk of instability in Argentina is high.
He further analyzed that Argentina's economic situation is still deteriorating. If Milley strongly implements the policy of closing the central bank and implementing dollarization, he will definitely face opposition due to his lack of political support, and Argentina's social and political unrest will most likely intensify. There is also the possibility that Milley would change his radical course and choose a more orthodox and moderate path, which might have better prospects.
But Felipe Campante told reporters frankly, "For politicians like Milley, who thrive on extreme conditions, it is almost impossible to choose a moderate path."