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In the market they indicate that a period of uncertainty is coming before the process that is coming.
The Chilean stock market feels the results of the constitutional plebiscite and the global fear for the effects of the second wave in Europe.
In the market, they did not contemplate that the Approve option will win with such a wide margin after more than 7.5 million Chileans went to the polls to decide to write a new Constitution of Chile. And investors reacted, as the IPSA, which measures the performance of the largest and most liquid stocks listed on the Santiago Stock Exchange, opened lower.
XTB Latam Markets analyst Francisco Román mentioned that “The extent to which the approval option won may cause some uncertainty among investors, who do not see solid pillars in our country to maintain their investments.”
Although there were several market agents who assured that local assets had already anticipated the victory of the Approval in their prices, the wheel has fallen 1.39% so far, reaching 3,753 points. With the passing of the hours the fall was losing flight and at noon it reached 0.36%.
In fact, some analysts anticipated high uncertainty in the market after the broad “Approve” victory.
One of the hit sectors is banking. Santander shares fell 2.64% and those of Banco de Chile plunged 2.09%. A smaller retreat has Itaú that yields 0.84%.
For the consumer sector there is also an impact. SMU’s shares fell 1.50% and CCU’s 1.98%.
Other titles such as Copec and CMPC are delayed 2.20% and 2.00% respectively. Entel fell 2.16% and Parque Arauco did it with 1.40%.
The day after
Some market agents have raised some reflections regarding the result of the plebiscite. In Rent 4 Stockbrokers commented that Sunday’s figures “show that regardless of whether people are more or less akin to a certain political trend, there is a very high consensus that people want urgent constitutional changes and somehow way to make modifications to the economic model. “
The Spanish capital agent recalls that after the 1988 plebiscite, when Chileans had to decide between Yes and No, the stock market collapsed 16.7% in the day of the following day after the option of resuming democracy won with 55.9%.
Under this context, in Renta 4 they expect that there could be an adjustment of the SP IPSA of between 5% and up to 8%, falling to 3,600 or even 3,500 points.
However, the broker points out that despite the overwhelming triumph of the Approval and the Constitutional Convention, “we believe that this political event It will serve to reduce violence, since the demands of the vast majority of the people are being channeled in an institutional way, which should translate into social peace, Beyond the differences and therefore, in the face of a short-term adjustment, we see a buying opportunity, considering that the IPSA is already at ‘cheap’ levels with 19 out of 30 IPSA companies trading below book value and in which accumulates a fall of 18.5% “.
The European entity points out that “people are unhappy with the institutions, they want greater equity and that the Constitution give them a framework of greater protection against a disease, a pandemic or an economic crisis, but We do not believe that the economic model will be dismantled, but there will be adjustments, in the sense of reducing the fragility that people feel, which when faced with a critical situation, this may mean losing years of effort in a very short term “.
Regarding the companies that could face a period of greater uncertainty in the stock market are ILC, Aguas Andinas and its parent IAM, and SQM.
Regarding the latter, in Renta 4 they say “surely we will have more in mind than before, the discussion as to whether or not lithium is defined as a strategic good. we do not believe at all in a nationalization of the company, and eventually it will not be a proper constitutional issue, at least it is likely that the renewal of the concession contract in the Salar de Atacama will begin to be discussed beyond 2030 “.
Global stocks down
In the global context, markets are not going through a good time. The increase in cases in Europe puts pressure on risky assets such as stocks. In the old continent, the stock markets operate with sharp falls, which are led by the German Dax, which fell 2.63%, followed by the French Cac, which fell 1.03%.
In the United States, investors are still waiting for the fiscal plan to encourage the world’s main economy, but also with the uncertainty generated by the imminent presidential election. With this, in Wall Street the Dow Jones falls 1.39%, the S&P 500 0.86% and the Nasdaq it falls 0.27%.
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