A slide in local assets, lingering capital controls and an economy still shunned by foreign investors are deflating hopes for a boom in Argentina’s capital markets, weighing on small brokerage firms that had bet on a revival after President Javier Milei took office two years ago.
That reality came into focus on September 11, when CNV, the country’s securities regulator, reminded firms they must disclose losses exceeding 15 percent of equity — a rule meant to trigger recapitalisation if needed. “We thought it appropriate to remind brokers of their obligation, which is set out in the regulations,” a CNV spokesperson said.
More than 10 brokerages, including Aurum Valores, RIG Valores, Transacciones Agente de Valores, Quant Capital and Elyca Servicios Globales, soon after that reported losses beyond that equity threshold.
Apart from potential recapitalisation efforts, the losses could result in much-needed consolidation in the sector. Argentina currently has about 280 licenced brokers, more than Brazil, Mexico, Chile or Peru, each with fewer than 100 registered brokers, according to CNV.
“A context of uncertainty, with sharp swings in peso interest rates, produced a mediocre performance across the industry,” said Pablo Repetto, head of research at Aurum in Buenos Aires.
Brokerage losses add to an increasingly pessimistic financial and political landscape for Milei. His disapproval ratings are up, the economy contracted in the second quarter and Argentina’s Central Bank intervened in the official currency market Wednesday for the first time since striking a deal with the International Monetary Fund in April. Milei’s rivals in the lower house of Congress also rejected two controversial vetoes on education and healthcare spending, reflecting his lack of legislative support before a crucial midterm vote in October.
In its filing to the regulator, brokerage Compania General de Valores Mobiliarios said “the main reason for this decrease is the decline recorded in the securities markets during the first half of 2025, which directly affected the valuation of the firm’s investments.”
Milei’s arrival in 2023 had fueled expectations that local and foreign inflows would improve the country’s business climate and create new opportunities. However, nearly two years into Milei’s administration, capital markets activity hasn’t grown, and competition among brokers is intensifying. Trading revenues, which hit record highs in 2023, have dropped more than 50 percent at some firms, filings show.
Brokers highlighted recent changes, such as the vanishing exchange-rate gap that had fuelled contado con liquidación (CCL) trades, a legal mechanism that firms used to obtain dollars. CCL volumes plummeted after authorities loosened capital controls for individuals. Spreads collapsed and margins evaporated, dealing a heavy blow to brokers’ core business.
The easing of capital controls also led Argentines to buy dollars directly from banks, using their brokerage accounts less frequently. The number of investment accounts has fallen by nearly half to about 1.9 million as of June, according to CNV. Despite that, the number of brokerages hasn’t changed.
At the same time, fresh investments and business opportunities didn’t materialise. “It didn’t turn out as we expected,” said Pablo Lucero, a partner at Elyca.
Confident in his relationships with corporates, Lucero launched his own company in 2022, helping small and medium-sized businesses to open custody accounts and tap instruments such as deferred-payment checks. Milei’s rise to power bolstered his optimism.
But running the business turned out to be tougher than Lucero anticipated. “It’s very hard to convince a company to take financing to expand or buy machinery if activity is weak and sales are falling,” he said.
The outlook for the remainder of 2025 isn’t rosy. The government still faces challenges as it seeks to stabilise the peso, and double-digit real interest rates, weak economic activity and Milei’s recent electoral defeat in Buenos Aires province are complicating matters further.
“We’re not expecting a recovery this year or next. It will take time,” Lucero said.
by Ignacio Olivera Doll, Bloomberg
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