BUENOS AIRES, June 12, 2025 (Reuters) — Argentina's Merval stock index surged 4.2% to a record closing high on Thursday after President Javier Milei's coalition secured passage of a landmark pension reform bill in the Chamber of Deputies, a victory that traders said could unlock further IMF disbursements and bolster the government's reform agenda.
The Merval closed at 2,847,312 points, surpassing its previous record set in March. The rally was broad-based, with all but three of the index's 25 constituents posting gains. YPF SA (YPFD.BA), the state-controlled oil giant, jumped 6.8% after the company separately announced a $1.2 billion joint venture with Chevron to expand Vaca Muerta shale production in Neuquén Province. The deal, signed Wednesday in Houston, calls for Chevron to drill 150 new wells over three years with first production expected in late 2026.
Market analysts said the pension bill's passage was the legislative breakthrough investors had been waiting for. For six months, the pension bill looked dead. Its passage tells investors Milei can still govern, even without a majority. The Chevron news added to the positive sentiment, showing that big foreign capital is willing to bet on Argentina again.
Grupo Financiero Galicia (GGAL.BA), Argentina's largest private bank, rose 5.1% on expectations that pension fund assets under management will grow as the reform encourages formal-sector contributions. Banco Macro (BMA.BA) added 4.7%, while Pampa Energía (PAMP.BA) gained 3.9% on hopes that pension fund investment rules will be relaxed to allow greater equity allocations.
Trading volume on the Buenos Aires exchange reached 28.4 billion pesos ($31.2 million at the official rate), nearly double the 30-day average. Argentine ADRs listed in New York also rallied, with the Global X MSCI Argentina ETF (ARGT) climbing 3.4% to its highest close since 2018.
The pension reform, which now moves to the Senate, raises the retirement age for women from 60 to 65 over eight years and tightens eligibility for early retirement from 30 years of contributions to 35. The government projects it will save 1.2% of GDP annually by 2030, reducing pressure on a system that currently pays out more than it collects. Opponents, including the CGT labor federation, have vowed to challenge the measure in court and stage nationwide protests next week.
CGT Secretary-General Héctor Daer called the bill "a death sentence for working-class retirees" at a press conference outside Congress, vowing to fight the measure in every courtroom and every street.
Analysts cautioned that the Senate vote, expected in early July, remains uncertain. Milei's La Libertad Avanza coalition holds just 7 of 72 Senate seats, and provincial governors from opposition parties have previously blocked pension changes. However, Thursday's vote gives Milei momentum heading into the final stretch before October's midterm elections.
The lower house vote was the easier half, analysts said. But even getting this far changes the narrative. For the first time in 2025, Milei's agenda is moving forward, not backward. If the Senate passes it, the political dynamic could shift significantly.
The Central Bank reported gross international reserves of $32.8 billion on Thursday, up from $28.4 billion at the start of the year, providing additional support for investor sentiment.
