Edenor Rallies on Rate Increase Speculation: Buenos Aires Mover

Empresa Distribuidora y Comercializadora Norte SA, Argentina’s largest power distributor, rallied to a nine-month high on speculation the government will allow it to increase rates.

Edenor, as the company is also known, advanced 5.9 percent to 1.02 pesos at the close of trading in Buenos Aires, the highest since March 30. The stock posted its sixth consecutive weekly gain, the longest winning streak since October 2010. The company’s shares have surged 56 percent in January, the most among members of the benchmark Merval equity index.

“There has been a lot of speculation of a rate increase, and the rumors have intensified,” Augusto Posleman, who helps manage 4 billion pesos ($806 million) in assets as the head of private banking at Puente Hermanos Soc. de Bolsa SA, said in a phone interview from Buenos Aires. “People are buying on the cheap on a bet they stand to gain a lot if rates rise.”

Edenor, the worst-performing stock on the Merval in 2012, has posted sixth consecutive quarterly losses as Argentina blocked rate increases and inflation eroded revenue. The government last allowed the company to raise rates 28 percent in 2007 and less than 10 percent in 2008. La Nacion, an Argentine newspaper, reported this week that some customers have received higher power bills.

The company doesn’t comment on market speculation on the stock’s performance, Eduardo Mirabelli, an Edenor spokesman, said by e-mail.

Today’s rally cut the stock’s loss in the past year to 34 percent, according to data compiled by Bloomberg. The stock retreated 54 percent in 2012 and 47 percent in the prior year.

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