by Mariana Santibáñez
Reversal of Fortunes
Once seen as an improving credit story, Argentina is being punished in the secondary markets as investors fret about the sustainability of growth policies.
Sentiment toward Argentina is souring as investors question the
sustainability of President Cristina Fernandez de
Kirchners growth policies. The sovereigns assets
are already lagging high-beta peers, and analysts see spreads
widening further in coming months if the government fails to
take a different tack soon.
Ever since markets realized Kirchner would win a landslide
victory in Octobers presidential elections, investors
have sent Argentina spreads ever wider amid fears that the
government will dig in its heel over macroeconomic policies
that they think are not working.
As of early November, the sovereigns five-year CDS
spreads were on an equal footing with Venezuela after being
some 400 basis points inside its troubled high-beta peer just
This marks an abrupt change in sentiment towards a country
that was finally seen making amends with the international
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