GDP coupon earns 11% as INDEC blows up growth

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GDP coupon denominated in pesos keeps on shining. It has climbed 11 per cent in two days and with high trading. Investors are taking positions in these derivatives because they know Argentine Statistics and Census Institute (INDEC, in its Spanish acronym) crushes peso bonds adjusting by cost of living.

Government boosting consumption, on the one hand, and Argentine presidential candidate Cristina Fernández de Kirchner announcing that she will follow that line despite having inflation, on the other, strengthen GDP coupon. At the end of the year, said derivative pays dividends according to 2006 economy growth, doing the same next year taking 2007 expansion measurements (higher than real data). INDEC is involved in it, which favours these derivatives by blowing up growth rates. July's measurement, when it snowed in Buenos Aires, gas became scarce and factories had to suspend workers, produced an expansion of 8.6 per cent.

On that month, coupons plunged 10 per cent because investors thought that economy was going to slow down due to energy problems. INDEC corrected such reality with its figures and showed a booming month with respect to activity.

With its strategy, the entity led investors to fly away from bonds and throw themselves into coupons.

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