Argentina Utility Stocks Jump after Tariff Increases announced

Argentina’s utility companies jumped after President Mauricio Macri fulfilled his promise to increase rates, paving the way for a reduction in government subsidies for consumers.
Shares of transmission operator Cia. de Transporte de Energia Electrica en Alta Tension Transener SA jumped 5.7 percent at 2:02 p.m. in Buenos Aires to the highest since Jan. 11. Energy distributors Pampa Energia SA and Empresa Distribuidora y Comercializadora Norte SA each rose at least 4 percent. Macri had promised to eliminate subsidies in the electricity sector as part of a strategy to reduce a fiscal deficit estimated to be at 7 percent.
Macri is undoing policies by his predecessors that throttled foreign investment and in his first month in office has also removed currency controls and restarted talks with creditors leftover from its 2001 default. Utility tariffs have been largely frozen since the country’s economic crisis of 2002 after the previous administration prohibited companies from raising prices, saying that lower bills benefited the economy by boosting consumption.
Some residents in the Argentine capital pay as little as 45 pesos ($3.35) every two months for electricity bills because of subsidies.

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