Néstor Kirchner, former president of Argentina who brought the country out of its 2001 economic collapse, died of a heart attack on Wednesday at the age of 60. His wife, current Argentine President Cristina Fernández, had succeeded him to the office three years ago.
Both husband and wife had been hostile to investors with what the Financial Times described as “their power-centric style and nationalist, heterodox policies.” And the markets’ reaction to his death demonstrated that quite clearly; Argentine stocks took off in the U.S. and Galicia, the country’s biggest consumer lender, rose by 26% in New York “as investors looked forward to a new era for business in the South American country.” The Argentine markets were closed for the 2010 census.
In the FT report, Douglas Smith, head of Latin America research at Standard Chartered, said, “The bottom line is near-term volatility, but I would say this is somewhat positive for the bonds and the economic outlook because it boosts the chance of the opposition which is more fiscally responsible and market friendly.”
Kirchner, formerly governor of Santa Cruz in Patagonia, rose to power as president in 2003; he held the post till 2007, when he was succeeded by his wife. Although Argentina had defaulted on nearly $100 billion in 2001, he managed to push the nation’s growth at such a pace that in 2006 it was able to pay a $10 billion debt to the International Monetary Fund in a single payment. Kirchner blamed the IMF for Argentina’s financial plight, and said there was “no way in hell” Argentina would appeal to the institution again.
There had been talk of Kirchner’s return to the presidency, with the election slated for 2011. Financial experts are relieved at the news that this is no longer possible. Roberto Sánchez-Dahl, who oversees $1.1 billion in emerging market debt for Pittsburgh-based Federated Investment Management, said in the report, “Sincerely, for Argentina and from a market perspective, there is nothing better than knowing that Kirchner will be out of the presidential race next year. For years his confrontational, resentful style towards investors, companies and bond holdouts deprived Argentina of much-needed capital.”