Argentina ETF Could Be In Focus Today

The newly minted Global X FTSE Argentina 20 ETF ARGT was one of the more widely anticipated new ETFs of 2011 as it gave investors another South American destination to evaluate and risk-takers got one more true frontier market ETF to take a look at, but ARGT has been pretty docile in just about two months of trading. An asset haul of over $3.7 million isn't bad, nor is average daily volume of over 10,000 shares. So while ARGT isn't completely unnoticed, it also hasn't been in the limelight much, if at all. That could change today and here's why: YPF YPF, Argentina's largest oil and natural gas producer, will reportedly make an announcement regarding a significant shale-oil discovery in the South American country's Neuquen province. Neuquen is a key producing area for YPF, accounting for 54% of the firm's proven crude oil reserves and 73% of its proven gas reserves at the end of 2009, MarketWatch reported. This could be a big deal for ARGT because energy stocks make up 36% of the ETF's weigth. YPF accounts for almost 6% of the ETF's weight while oil services provider Tenaris TS accounts for over 21%. Energy is obviously pivotal to ARGT's fortunes and that's not surprising as Argentina is South America's fourth-largest oil producer behind Brazil, Venezuela and Colombia. The problem is Argentina is falling back while Brazil and Colombia (at least) are racing ahead. Don't expect the YPF announcement to be along the lines of a Brazilian discovery that results in billions of barrels of potential reserves. Expect something along the lines of 2,000 barrels a day or perhaps a tad higher. Still, any news that Argentina is finding ways to bolster its oil and gas production could be a positive near-term catalyst for ARGT.