DJ Argentina Stocks Up On 1Q Results, Crude Prices; Bonds Mixed

By Drew Benson

Of DOW JONES NEWSWIRES

BUENOS AIRES (Dow Jones)--Argentine stocks edged higher Friday, getting a boost from some first-quarter earnings reports from power-generating companies and rising oil prices.

Bonds were mixed, while the peso firmed slightly to ARS3.1775 against the dollar from ARS3.18 on apparent central bank dollar futures sales.

The Buenos Aires Stock Exchange's benchmark Merval Index rose 0.59% to 2,114.44 in mild trading. Volume totaled ARS105.9 million ($33.4 million), with ARS77 million of that in local shares.

The shares of Power generators Central Puerto (CEPU2.BA) and Endesa Costanera (CECO2.BA) rose after both reported strong first-quarter results Friday. Central Puerto jumped 5.12% to end at ARS6.25. Its net profit rose to ARS51.3 million in the quarter from ARS20.4 million in the year-earlier period. Endesa Costanera (CECO2.BA) was up 3.70% at ARS4.20. Its profit climbed to ARS24.5 million from ARS800,000. Both companies said they benefited from better energy prices.

Petrobras Participaciones Energia (PZE), which saw its first-quarter profit rise 5% to ARS192 million, ended 3.83% higher at ARS4.33. The results of the Argentine unit of Brazil's state-run oil company Petrobras (PBR) were boosted by higher crude prices.

In the local debt market, the benchmark Discount bond in pesos continued to slide, from ARS92.80 to ARS91.9, with a yield of 11.35%. The Bogar 2018, another peso note linked to inflation, recovered slightly however to close at a price of ARS126, with a yield of 13.73%, from ARS125.50.

Beleaguered government statistics agency INDEC reported Friday that the consumer price index for April rose 0.8% on the month and 8.9% on the year. That was slightly above what economists thought the government would report, but still well below where they see actual inflation - 2% higher on the month and above 20% on the year. The government allegedly has been underreporting inflation since January 2007, a problem that has seriously undercut inflation-linked bonds over the past year. More recently, bonds have fallen sharply on uncertainty related to an ongoing farm strike.

"The problem with the local market is directly linked to the perception of political instability," said Eduardo Blasco, the head of local brokerage Maxinver. "If you look at the numbers, it's crazy that people aren't buying bonds," he added.

-By Drew Benson, Dow Jones Newswires; 54-11-4311-3127; andrew.benson@dowjones.com

(END) Dow Jones Newswires

05-09-08 1739ET