News

Chilean stock exchange is the most profitable of the year
Published: September 2, 2010

During this year, the Chilean stock market has had an accumulated profitability of 26.35% ended August with the best performance compared to its most important peers in the world.

Source: www.df.cl

The unexpected economic growth of the country has been a key factor for this performance, as well as the defensive nature of the local market and the good corporative results that raised the bet for stocks in the sectors related to domestic demands. According to Francisco Errandonea, Director of Studies of Santander GBN, another key factor is that "the major global problems exist here, but they don't really affect us because we are at the other end of the world".

The analysts' prospect is favorable if we add to these factors an international context inclined towards investment into emerging countries, where Chile stands out.

In this scenario, the Chilean market rises as the most profitable stock exchange on a yearly basis and during August, after rising last month 3.69%. This performance is followed by the Peruvian stock exchange that moves forward 6.96% annually and 6.15% during the month.

Analysis by sector

Banking and retail are the most distinguished sectors regarding their performance in the Selective Stock Price Index (IPSA), from which the Banco de Chile stocks are leading the way with a 91.88% advance so far this year, and Cencosud with an annual accumulation of 76.40%. However, for the banking sector, some already foresee a change in this tendency. This because after a strong stock exchange performance of 53.3% this year (27.9 percentage points over the IPSA), "it is highly unlikely for the bank stocks to continue upward, which sustains our advice to 'reduce' our banks statistical sample", according to Banchile Inversiones.

Dollar drops $ 18 CLP in the month

The volatile environment in the world markets has boosted the dollar in the world these last weeks, but it hasn't boosted the local currency exchange market. In August, Chile was the emerging country where the currency dropped the most after dropping $18.2 CLP by the end of yesterday in $502.8 CLP buyer and $503.2 CLP seller, forced by rise in the price of copper and the advance in the TPM. The projections of the operators and economists still aim to the fact that the drop could go deeper in short term, making the dollar cost less than $500 CLP. In the near future, however, it is expected by many to close this year near $510 - $515 CLP.