Skip to main content

Chile's La Polar Falls as Jobless Data Signals Consumer Slump

By Nathan Gill
     July 2 (Bloomberg) -- Empresas La Polar SA, a Chilean department store operator, fell to the lowest in a month on concern higher-than-expected unemployment in the U.S. and Chile may crimp consumer spending at the company’s stores.
La Polar slid 2.6 percent to 1,910 pesos in Santiago trading, the lowest since May 27.
     Employers in the U.S. cut more jobs than forecast in June and the unemployment rate rose to the highest in almost 26 years, according to U.S. Labor Department figures released today in Washington, adding to concern that a prolonged global recession will force Chilean companies to fire more workers as demand for the nation’s exports shrinks. Chile’s jobless rate rose 4.1 percent to 10.2 percent in May, the National Statistics Institute said June 30, higher than the 10.1 percent median forecast of 13 economists in a Bloomberg survey.
     U.S. jobless data “signals that the recovery is going to be slower than what many thought,” Patricio Hernandez, an analyst at Banchile Inversiones, said in a telephone interview from Santiago. “The biggest part of Chilean retail companies’ earnings come from the financing side and this is affected when unemployment rises. We’ll continue seeing worse employment figures than what we’re seeing now.”
     Investors also sold shares in reaction to the company’s rejection last week of supermarket chain Omega SA’s merger offer, Hernandez said. The stock had risen 24 percent from May 27 through June 26 after Omega, controlled by Southern Cross Latin America Private Equity Fund III LP, offered to merge its supermarkets with the retailer’s department stores.
     The company’s shares have fallen 8.8 percent this week. Rival retailer Ripley Corp SA also fell in Santiago trading. Chile’s third-largest department store operator retreated 2 percent to 398 pesos, the lowest in a week.


Popular posts from this blog

Bailout Risk Grows for Ecuador After Worst Earthquake in Decades

By Nathan Gill April 19, 2016 (Bloomberg) -- Before a 7.8-magnitude earthquake struck Ecuador on Saturday, the South American nation’s finances were already in tatters as the government struggled to meet payments to municipal authorities, oil companies and even cancer hospitals. Cut off from global bond markets, President Rafael Correa must now find enough money to rehouse thousands.
As volunteers continue to rescue victims from the rubble of collapsed homes and buildings on Ecuador’s Pacific coast, doubts are growing about the country’s ability to pay for the reconstruction. The nation is already in its worst recession since the financial system collapsed in the late 1990s, and international reserves are at their lowest levels in almost seven years.
Click hereto read the full story on Bloomberg News.

Ecuador Quake Death Toll Rises as World Leaders Offer Support

By Benjamin Bain and Nathan Gill April 16, 2016 (Bloomberg) -- World leaders from the Vatican to Washington offered support to Ecuador as casualties mounted following one of the strongest earthquakes to strike the South American country in decades.
By Sunday evening, the number of dead had climbed to at least 246, from 77 earlier in the day. At least 2,527 were injured, the government said. President Rafael Correa flew to the epicenter in hard-hit Manabi province after cutting short a trip to Rome, for a conference at the Vatican, in the aftermath of the 7.8-magnitude earthquake.
Click here to read the full story on Bloomberg News.

77-Year-Old Wall Street Favorite to Face Fujimori in Peru Runoff

By Nathan Gill and John Quigley April 12, 2016 (Bloomberg) -- The victory by Pedro Pablo Kuczynski, a former finance minister, for second place in Sunday’s Peruvian president elections sets up a showdown between two business-friendly candidates, part of a regional backlash against left-wing politicians.
Kuczynski, a 77-year-old Oxford-trained political economist who’s spent more than 50 years championing debt control and free trade, won 21 percent of vote with 96 percent of the ballots counted, according to the electoral office. He will face Keiko Fujimori, who won 39.8 percent, in a second-round vote on June 5.
Click here to read the full story on Bloomberg News.