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Showing posts from October, 2008

Chile's Construction Chamber, Citigroup Halt AFP Habitat Talks

By Nathan Gill
     Oct. 30 (Bloomberg) -- Chile's Chamber of Construction and
Citigroup Inc. halted negotiations over control of AFP Habitat,
a Chilean pension fund, Diario Financiero reported, citing
unidentified sources involved in the talks.
     Negotiations over the chamber's offer to buy Citigroup's 40
percent stake in the fund for about $300 million were stopped
because of liquidity concerns at the U.S. company and a drop in
the fund's share price since the August bid, the newspaper said.
     AFP Habitat was worth about $373 million yesterday as
compared with $549 million on Aug. 27, Diario Financiero said.

Chile's Banco Santander Says High Inflation Slows Loan Growth

By Nathan Gill
     Oct. 30 (Bloomberg) -- Banco Santander Chile, the country's
biggest lender, said consumer lending has slowed as higher
inflation hurt lower-income customers.
     Raimundo Monge, corporate director of strategy and financial
planning at the bank, said the company will compensate for
falling revenue from personal lending by focusing on more
affluent consumers as well as local corporations.
     ``We are seeing a deceleration of loan growth, especially in
consumer spending,'' Monge said today in a conference call from
Santiago. The company does not expect ``a big deceleration
because corporate lending has been picking up lately and that
trend can be sustained,'' he said.
     Chile's 9.2 percent annual inflation rate in September was
more than three times that of two years earlier. Monge said
inflation should lower in the months to come.
     The company's third-quarter profit rose 13 percent to 96
billion pesos ($145 million) from the sam…

MY FIRST CORRECT: Soquimich Comercial Nine-Month Net Rises (Correction)

(Corrects company name in first paragraph.)

By Nathan Gill
     Oct. 28 (Bloomberg) -- Soquimich Comercial SA, a Chilean
fertilizer maker, said profit more than tripled for the first
nine months of this year as prices for its products rose.
     Net income rose to 9.08 billion pesos ($13.4 million) from
2.78 billion pesos a year earlier, the Santiago-based company
said today in a statement on the Web site of Chile's securities
regulator.
     The company said the devaluation of the peso may help it
overcome falling commodity prices in the second half of the year.

Chile Will Meet Long-Term Budget Surplus Goals, Velasco Says

By Nathan Gill
     Oct. 24 (Bloomberg) -- Chilean Finance Minister Andres
Velasco comments on Chile and the international financial
crisis. He spoke to reporters today in Santiago.

On the 2009 budget surplus:
     ``The important thing is the structural surplus, not the
actual surplus. We have a long-term goal of the equivalent of
0.5 percent of gross domestic product. We will meet that goal
this year and we will meet it next year.''

On the price of copper:
     ``The price of copper has fallen, but the price of oil
has, too. We import fuel and what effects Chile is the totality
of what economist call the terms of exchange, or the totality
of imports and exports. We are winning as a country on the side
of oil.''

On unemployment:
     ``Obviously we are following this, but what I would
suggest is that we use hard figures, not speculations. The
situation we are seeing in the metropolitan region up until
Sept. 30 is a continued creation of employment. The
unemployment r…

Chile's Cencosud Delays Projects Due to Credit Crisis (Update1)

By Nathan Gill
     Oct. 23 (Bloomberg) -- Cencosud SA, Chile's biggest
retailer, has delayed some projects because of the credit crisis,
Chief Executive Officer Laurence Golborne said.
     Cencosud's home-improvement chain Easy has been ``affected''
by the global economic slowdown and is revising its investment
plans for 2009, he said.
     ``We have delayed a series of projects and we are revising
when will be an opportune moment to restart,'' he told reporters
in Santiago.
     Cencosud, which is opening its first Easy store in Bogota
today, plans to open three more outlets in Colombia in the second
half of next year, Golborne said.
     He expects Cencosud's first home-improvement store in
Colombia to generate sales of $25 million next year.
     The shares rose 0.5 percent to 1,010 pesos at 12:29 p.m. New
York time in Santiago.

Latin America Needs Market Confidence, IOSCO's Tanzer Says

By Nathan Gill
     Oct. 22 (Bloomberg) -- Greg Tanzer, secretary general of the
International Organization of Securities Commissions, comments on
regulation and transparency in Latin American markets. Tanzer
spoke at an interview in Santiago.

On steps Latin American securities regulators should take to
improve their markets:
     ``For Latin American securities regulators, and for
regulators in other parts of the world striving to improve
regulation, particularly with a view to better transparency,
improving investors' confidence in the market is critical. The
IOSCO benchmarks and the IOSCO principles of securities
regulation provide a very good road map for that.
     ``There's real value in strong and robust regulation,
especially at times like this. It's been proved time and again
that capital will gravitate to markets that have liquidity and
the markets that have liquidity tend to be those that are well
regulated because people can have more confidence in them.'&…

Chile's Central Bank May Sell Dollars If Needed, Corbo Says

By Nathan Gill
     Oct. 16 (Bloomberg) -- Chile's former central bank President
Vittorio Corbo comments on the effect of the financial crisis on
Chile's economic outlook. Corbo spoke to reporters after a
seminar in Santiago today.

On the possibility that the Chilean central bank will sell
dollars to increase the value of the peso:
     ``The central bank will evaluate the possibility, but Mexico
has sold 10 percent of its reserves and its currency has devalued
more than Chile's. In this case, it is extremely useful to be
flexible. At some point it could be convenient to use the
reserves. Given the evolution of the world economy, the bank may
decide that it has sufficient accumulations and that it could
sell part of what it has accumulated. If the bank thinks it
should use them now, it will consider it at some point. The
important thing is not to rush into these things, this is normal
volatility.''

On Chile's country risk:
     ``There is no risk, because Chil…

Chilean Retailer D&S Rises on Acquisition Speculation (Update2)

By Nathan Gill
     Oct. 15 (Bloomberg) -- Distribucion y Servicio D&S rose in
Santiago trading, helping limit a decline in Chile's main stock
index, on speculation it will be acquired by another retailer.
     D&S, which operates Chile's biggest supermarket chain,
climbed 3.7 percent to 195 pesos. A 19 percent gain so far this
week is the steepest weekly rise since May 2007. The Ipsa index
fell 0.4 percent.
     ``It's nothing more than the same rumor that's been going
around--that D&S could be sold, or another company is interested
in buying them,'' said Jose Javier Castaneda, a trader at
Santiago-based brokerage IM Trust, said by phone today. ``The
same thing has happened several times this year. Each time the
stock rallies and a few days later people start to sell and it
goes back down.''
     Chilean antitrust authorities rejected a planned merger
between D&S and department store operator SACI Falabella SA in
January. In July, El M…

Torrijos Says Panama Secures $2.3 Billion for Canal Expansion

By Nathan Gill
     Oct. 14 (Bloomberg) -- Panamanian President Martin Torrijos
said the country reached agreements with international lenders,
such as the Inter-American Development Bank, for $2.3 billion in
financing to expand capacity of the Panama Canal.
     Panama will borrow $500 million from the European Investment
Bank, $800 million from the Japan Bank for International
Cooperation, $400 million from the IDB, $300 million from the
International Finance Corp. and $300 million from the Andean
Development Corp., Torrijos said in a statement distributed today
by the canal authority.
     The authority last year announced a five-year, $5.25 billion
plan to add a third set of locks that will enable the canal to
handle bigger ships.
     The loans reflect ``a lot of trust and confidence,'' in the
project, Alberto Aleman, chief executive of the Panama Canal
Authority, said in a conference call today from Panama.

Santander Chile Extends Rally as Credit Concern Eases

By Nathan Gill
     Oct. 14 (Bloomberg) -- Banco Santander Chile, the country's
biggest lender, extended its biggest gain in a decade in Santiago
as analysts recommended buying the shares on valuation and as the
U.S. bank bailout plan eased credit concerns.
     Santander gained 12 percent to 21 pesos, after surging 14
percent yesterday in the steepest rally since shares started
trading in May 1997.
    ``The only reason the bank is going up so much is that it was
too discounted,'' Javier Pizarro, an analyst at Larrain Vial SA,
said by phone from Santiago today. ``It's a good buy and a good
price.''
     Banco Santander's price-to-earnings ratio fell to 10 at the
end of last week from a multiple of 17 a year ago. Financial
stocks also rallied today after European and U.S. governments
pledged to buy stakes in banks to halt a credit freeze.
     The London interbank offered rate, or Libor, that banks
charge each other for three-month dollar loans slid 12 bas…

Cencosud Extends Gain on Plans to Shore Up Finances

By Nathan Gill
     Oct. 14 (Bloomberg) -- Cencosud SA, Chile's biggest
retailer, extended its steepest gain in four years in Santiago
trading after Banco Santander SA said a plan to raise capital may
reduce the company's financial ``uncertainty.''
     The shares rose 9.8 percent to 1,100 pesos after jumping 15
percent yesterday in the biggest gain since trading began in May
2004.
     Santiago-based Cencosud plans to sell 150 million new
shares, it said in an Oct. 10 statement. The controlling
shareholder will buy $120 million of the planned $200 million
share sale, Chairman Horst Paulmann said in an interview with El
Mercurio published Oct. 12.
     The retailer was reiterated at ``buy'' at Santander.
     The ``news is obviously a strong show of support for the
company,'' Raul Barros, analyst at FIT Research Corredores de
Bolsa SA, said by phone from Santiago today.
     Chile's peso, which last week tumbled to a four-year low
against the U.S. …

Chilean Pension Funds Suffer Worst Declines Since Asia Crisis

By Nathan Gill
     Oct. 10 (Bloomberg) -- Chile's pension funds have suffered
their worst losses this year since the Asian financial crisis of
a decade ago, Alejandro Charme, the country's superintendent of
pensions, said.
     All of Chile's pension funds have dropped, with the
``riskiest'' plans suffering losses of about 25 percent this year
through Sept. 30, Charme said. Plans with the ``least risk'' lost
0.2 percent of their value.
     ``The last crisis of this sort was in 1998,'' Charme told
reporters at a conference in Santiago. He advised Chileans not to
withdraw their funds and said it would be ``prudent'' for those
nearing retirement to postpone that decision.
     Chile's pension funds represent about 10 percent of the
value of the country's main index.
     The Ipsa index fell 7.5 percent to 2,037.47 at 12:37 p.m.
New York time and was poised for the steepest weekly decline
since it began in 1989, according to Bloomberg…

Telefonica Chile Falls After Purchase Offer Rejected (Update4)

By Nathan Gill and James Attwood      Oct. 7 (Bloomberg) -- Cia. de Telecomunicaciones de Chile SA fell to the lowest in a month in Santiago trading after minority shareholders blocked an offer by controlling shareholder Telefonica SA to buy shares it doesn't already own.      Telefonica Chile, as the country's biggest fixed-line carrier is known, dropped 4.1 percent to 870 pesos. The stock had risen 7.5 percent before trading was halted for today's vote in Santiago.      About 56 percent of shareholders accepted a company rule change required to allow the bid to proceed, falling short of the required two-thirds acceptance. Madrid-based Telefonica SA was seeking to buy the 55 percent of Telefonica Chile it doesn't already own for 1,000 pesos a share for series A shares and 900 pesos for series B stock.      ``It was a generous offer, in line with what the company was worth on the market, according to all the analysts, but in the end shareholders decided to reject the …

Chile Posts First Monthly Trade Deficit in Six Years (Update1)

By Sebastian Boyd and Nathan Gill      Oct. 7 (Bloomberg) -- Chile posted its first trade deficit in six years in September as prices for copper, the country's biggest export, tumbled.      Chile imported $319 million more than it exported, the central bank said on its Web site. The median estimate of 15 economists polled by Bloomberg was that Chile would post a trade surplus of $618 million. Exports totaled $5 billion and Chile imported $5.4 billion in September, the central bank said.      Copper exports account for about 38 percent of Chile's gross domestic product, according to central bank figures. Production of the metal fell in July and August as ore quality deteriorated.      The price of copper, which accounts for 55 percent of the country's exports, fell 16 percent in September.

Chilean Government Deposited $1.05 Billion in Banks on Interest Rates

By Nathan Gill and Sebastian Boyd      Oct. 6 (Bloomberg) -- Chile's Finance Ministry deposited $1.05 billion in local banks last week, Minister Andres Velasco told reporters today.      The ministry was taking advantage of interest rates offered locally, Velasco said. Chilean banks raised interest rates on term deposits as they sought to overcome a shortage of liquidity in dollars.      Latin American central banks have pumped liquidity into interbank markets as the U.S. credit freeze spread and the counterparties that usually provide foreign currency financing failed, were bought or cut off funding. The central bank canceled daily purchases of $50 million of dollars and instead plans to offer $2 billion of dollar liquidity in four weekly auctions.      ``The Treasury keeps the funds deposited in banks, not underneath the mattress,'' Velasco said. ``Last week, we saw that rates in Chile were somewhat higher than abroad. Taking advantage of the fact that some deposits abr…

Chile Inflation Accelerates on Food, Transportation

By Sebastian Boyd and Nathan Gill      Oct. 3, 2008 (Bloomberg) -- Chilean consumer prices rose more than forecast by economists last month, led by electricity and food, boosting expectations that the central bank will raise interest rates for a fifth month next week.      Inflation accelerated 1.1 percent in September, compared with 0.9 percent a month earlier, the National Statistics Institute said today. Inflation was faster than the median forecast of 0.9 percent in a Bloomberg survey of 22 economists.      Today's consumer price report may increase the likelihood that Chile's central bank will raise interest rates for a fifth consecutive month next week to bring down an annual inflation rate that's triple the bank's target. After four straight half-point increases, policy makers may slow that pace next week in response to the global credit crisis.      ``The bank is set to hike rates again next week, though given the global dislocations it's lik…