For those interested in investing in Argentina, having a good understanding of its stock market indices is essential. That will allow us to analyze the market and even find a suitable ETF.
Argentina is a complicated country. Not just when it comes to investing, but in general. Argentines know this better than anyone. Consequently, investing in Argentina is not for everyone.
The Argentine stock market is highly cyclical, with plenty of volatility, and exposed to many variables. The most determining factor is probably its currency, the Argentine Peso, which trades under the ISO code ARS.
Argentina’s currency is one of the weakest in the world due to the country’s high inflation rates.
On the other hand, there is no doubt that Argentina has a lot of potential. For those interested in investing Argentina, especially if they want to do it passively through an ETF, familiarizing themselves with their stock market indices is a necessary step.
Let us see them in detail.
The S&P MERVAL is the most famous stock market index in Argentina. Most commonly known as MERVAL, whose name comes from Mercado de Valores (Stock Market), it was introduced in 1986.
It is composed of 20 of the largest companies listed in Argentina, and these are weighted according to their market capitalization adjusted for free float. Additionally, no one company can account for more than 15% of the entire value of the index.
Currently, the index is owned by the US company S&P Dow Jones Indices.
Some of the most important corporations in the MERVAL index are Pampa Energía, YPF, BBVA Banco Francés and Telecom Argentina.
The original version of the index is published in Argentine Pesos, but versions in other currencies are also available, most notably in US Dollars and Euros.
If you want to learn more about it, here is the link to the official website of S&P Dow Jones.
S&P/BYMA Argentina General
The S&P/BYMA Argentina General is the other major stock market index of Argentina calculated by the US company S&P Dow Jones.
BYMA stands for Bolsas Y Mercados Argentinos (Argentine exchanges and markets), which is the name of the company that manages the Buenos Aires stock exchange.
This index also weights its stocks based on their market capitalization adjusted for free float. But it is composed of all the companies listed in the first category of the Argentine stock exchange, and thus contains a lot more stocks than the MERVAL.
It is worth highlighting that both indices are highly correlated because the large companies of the MERVAL have a substantial representation within the S&P/BYMA Argentina General.
As in the previous case, the official index is calculated in Argentine Pesos. But there are versions in other currencies.
For more details, you can use the following link.
Finally, the MSCI Argentina is another useful index for those interested in investing in the South American country.
Calculated and owned by the US company MSCI, this index is composed of all Argentine stocks that are included in the global MSCI Emerging Markets world stock index.
The exact number of companies within the index is not stable but varies depending on how many meet the criteria to be included.
The most important criterion is that of the minimum market capitalization required. Because the Argentine stock market has had very poor performance over the last several years, few companies are big enough to be part of the MSCI Emerging Markets index and, as a result, the MSCI Argentina index.
Thus, at the end of 2022, the MSCI Argentina is composed of 7 companies. This makes it a highly concentrated index.
For additional details, check out the MSCI website.
I hope you found this analysis about Argentina’s stock market indices useful.
If you want to read about the stock indices in another Latin American country, I suggest you check out the following link:
Top Stock Market Indices in Mexico
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