Argentina keeps focus on developing local capital markets

Argentina keeps focus on developing local capital markets

Argentina Bonds Project & Infrastructure Finance Interviews

Argentina is betting that legislation to reform the country’s capital markets will attract investments and drive economic growth, Finance Minister Luis Caputo said at LatinFinance’s 3rd CumbreFinanciera.

Caputo said he expects Congress to take up the legislation in the coming months. Under the proposed bill, the government hopes to ease restrictions on foreign investment and mutual fund activity in the local markets.

"We need a strong and reliable local market," he said. "Over the last year, we’ve accomplished some achievements by returning to the markets but we need to transfer those benefits to the rest of the economy. It’s an issue that has never been a major focus."

Caputo said the government has made strides in developing the local capital markets by building a peso curve with three-, seven- and 10-year notes.

Argentina’s recent tax amnesty is also helping to attract resources to develop the local markets, he said. The amnesty program, which was launched last year, has attracted some $100bn in undeclared assets from Argentines.

A new capital markets law will also be key to helping develop other areas of the economy, including Argentina’s mortgage market, Caputo said. "It has enormous growth potential," he said.

Caputo touched on other issues in an onstage interview, including infrastructure and Argentina’s sovereign debt issues.

On infrastructure, he said the government is looking to collaborate with multilateral agencies to develop a financing structure. "Their role is fundamental," he said. He added that the government is considering several options for funding its infrastructure plan, with PPPs expected to play an important role. 

Asked about Argentina’s spread compression, Caputo said over the last year the country has managed to tighten spreads by some 250bp when compared to Brazil.

"We obviously can’t correct everything in one year," he said. "But we’ve seen phenomenal compression. We’ll continue to tighten our country risk. Investors are showing a lot of confidence in Argentina."