Argentine state-owned energy firm YPF has seen its bonds and shares take off this year, despite a wider economic malaise, with hope of a shale boom in the South American nation’s huge Vaca Muerta formation luring investors.
The state firm’s bonds have risen between 5%-11% this year, even as some sovereign debt has plummeted as much as 35% amid concerns about near-zero foreign reserves, inflation heading towards 100% and a weakening peso currency. YPF shares are also up some 80%.
Behind the divergence is a major government push to increase production from Vaca Muerta, a shale formation in southern Patagonia the size of Belgium. It is the world's second largest reserve of shale gas and the fourth largest for shale oil.