Market Overview

Time to Cry For Argentina ETF? (ARGT, YPF)

When it comes to ETFs tracking South American nations, there are good ones and ones that need a little help. Despite finding a home in the illustrious CAPPT acronym the Global X FTSE Argentina 20 ETF (NYSE: ARGT) has some near-term hurdles to deal with.

Last week, we predicted ARGT was primed to return to its 52-week low and that was before all of the talk regarding the Argentine government moving to nationalize YPF S.A. (NYSE: YPF).

Today, the Argentine government proceeded with that plan as a matter of "public interest," sending shares of YPF plunging more than 11% in late mid-day trading. As of 1:30 PM Eastern time, ARGT had yet to trade a single share today. Soon after, 1,500 shares in ARGT changed hands, sending the $3.5 million fund down 3.2% in the process.

Regarding the YPF nationalization, Spanish financial institutions hold a large percentage of the company. Spanish fired back, stating that they viewed the firm's interests as being in line with Spain's national interests, Benzinga reported.

With an allocation of 6.8%, YPF is ARGT's fourth-largest holding, trailing Tenaris (NYSE: TS), Mercadolibre (Nasdaq: MELI) and Arcos Dorados (NYSE: ARCO). In other words, with the exception of YPF, ARGT's top holdings aren't solely dependent on Argentina for the bulk of their revenue.

Regarding the YPF nationalization, Spanish financial institutions hold a large percentage of the company. Spanish fired back, stating that they viewed the firm's interests as being in line with Spain's national interests, Benzinga reported.

The problem for ARGT now isn't the stocks its top three holdings, it's the Argentina label because the YPF nationalization gambit will likely scare foreign investors away from the South American nation, hampering direct foreign investment in the process.

Given its thin volume, ARGT is not shortable and has no options trading on it, so the sidelines are the best place to be for the moment as ARGT is just 83 cents above its 52-week low.

For more on investing in Argentina and the CAPPT acronym, please click HERE.

Posted-In: News Short Ideas Emerging Market ETFs Futures Technicals Commodities Events Global Best of Benzinga

 

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