Investors want more from Argentina Investors want more from Argentina
Argentina's president Mauricio Macri’s economic reforms have boosted merger and acquisition activity in the South American country but international investors remain cautious given years of political risk.
A report this week by BN Americas found M&A activity targeting Argentina had increased from US$1.7 billion to US$11.6 billion in 12 months, reflecting confidence in Macri’s pro-business reforms.
But analysts say while there has been a rapid increase in activity, investors were still wary of risks.
"Global investors have yet to really open their risk appetite to invest in Argentina," Columbus Merchant Banking partner Diego Augsburger told the wire service.
He said almost all major walls restricting investments from entering the country had been torn down.
long-expected, active M&A activity, but it has not,” he said.
Miners have been wary of issues including restrictions on mining exports, provincial prohibitions and the lack of a clear mining policy, as secretary of mining Daniel Meiln has explained to Mining Journal.
Argentina’s government is now working with its 23 provinces towards a common mining policy, which it hoped to negotiate before the end of this year.
A new, nation-wide policy would benefit companies including Canada’s Pan American Silver, looking to develop the Navidad silver project in the Chubut province, where open pit mining is banned.
London-based Capital Economics market economist Edward Glossop believes Argentina’s business environment for investors had improved and more deals could follow.
“There have been a lot of market-friendly reforms under the new president, which is probably going to trigger an increase in M&A activity – and a rally in Argentina’s markets more generally,” he told BN Americas.
Mining Journal