IKN

Chart courtesy of here

Here’s a new chapter in the ongoing saga we know as ‘Only In Argentina’. Every quarter the headline Merval index of the Buenos Aires Stock Exchange (BCBA) changes its composition. Normally the bigwigs at the BCBA change the percentage weighting of the companies on the list, and sometimes they add or take away companies.

The new composition starts tomorrow (the beginning of the 2nd quarter) and as well as removing three minor-weighting companes from the index (Mirgor, Molinos Rio and Aluar) the sages have decided to raise the weighting of seamless tubemaker Tenaris (US-listed as TS) from 35.22% to 46.48%. Or in other words, nearly half the index is now dependent on a foreign company*. Add the 13.69% weighted to second placed Petrobras, another non-Argentine entity, and over 60% of the supposedly Argentina index is made up of two non-Argentines that happen to do a minor part of their business in the country.

How Argentina still manages to get a seat at the G-20 summits is quite beyond me.

*Sorry guys, we’ve been through this before; whatever Argentines might try to tell you Tenaris is most definitely not an Argentine company. I’ve won money betting on this line item.