What happened
All of a sudden, Argentina is popular again. Or at least, one of its banks is.
Shares of Argentine bank Grupo Supervielle (SUPV 4.87%) are hopping today, up 10.8% as of 2 p.m. EST and up a combined 35.6% over the last 10 days of trading. You can probably thank Martin Guzman for that.
Image source: Getty Images.
So what
Guzman is Argentina's new minister of the economy, just appointed by incoming president Alberto Fernandez. Guzman is a Brown University Ph.D. and former Columbia University economics professor. He was described this week in Britain's Guardian newspaper as a "brilliant economist who combines youthful energy with a wisdom well beyond his 37 years," with experience testifying "before the U.S. Congress on Puerto Rico's debt crisis and [speaking] at the United Nations about the need for a better international system for resolving sovereign debt crises."
Given the level of skepticism that's been leveled at Fernandez regarding his credentials as an economic reformer, it's hard to imagine a savvier pick to allay Western concerns about his commitment to righting Argentina's economic ship.
Now what
Guzman's first step: It was reported this week that the Fernandez administration has approved "a package of emergency measures aimed at lifting the South American country out of its worst economic crisis in years."
Taxes on foreign currency purchases, agricultural exports, and car sales will be increased, but in a manner targeting only the "upper and middle classes." For the poor, utility prices will be frozen and pensions increased. At the same time, the government will attempt to spark growth, restructure its debt, and strike a deal for new loans from the International Monetary Fund.
It's a tall order, and there's no certainty things will work out. But with Argentina's stock market in a funk (Supervielle shares in particular are down more than 50% over the past year, despite the recent rally), investors appear to believe there's nowhere to go from here but up.
