Repsol Drops After YPF Loses Financial Incentives: Madrid Mover
Repsol YPF SA (REP), Spain’s largest oil company, was the biggest loser on the country’s benchmark Ibex 35 Index (IBEX) today on news that its YPF Argentine business will lose financial incentives intended to boost investments.
Repsol dropped 4.1 percent to 20.28 euros in Madrid, the steepest decline in almost a month. Argentina’s Planning Ministry said Feb. 3 that it will stop a three-year program that provided about 10 billion pesos ($2.3 billion) of incentives to oil companies.
“This seems to be part of a standoff between the government and the company,” Stuart Joyner, a London-based analyst at Investec Securities, said by phone today. “The value of the subsidies for the industry is not huge, but the impact has more to do with a potential nationalization of YPF.”
President Cristina Fernandez de Kirchner is stepping up pressure on YPF, controlled by Madrid-based Repsol, to cut dividends, boost investment and restrain prices as fuel imports and capital flight surge. Government officials, lawmakers and oil industry specialists discussed a possible renationalization of YPF on several recent occasions, Pagina/12 reported.
To contact the reporter on this story: Manuel Baigorri in Madrid at mbaigorri@bloomberg.net
To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net
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