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Investors turn their backs on new Chilean government

by Yucatan Times
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Chile Stock Exchange plunges 6%, and the peso falls

(Santiago de Chile – TYT) – The victory of the leftist party augurs a change concerning the economic policies of recent years, as it will increase the role of the State. Santander’s subsidiary, one of the losers.

The victory of the leftist candidate Gabriel Boric has not gone down well in the markets. After London’s first warnings, mining companies such as Glencore (-2.76%) or Anglo American (-2.60%) began – and ended – confirmed investors’ fears after the opening of the Santiago Stock Exchange. 

The SP IPSA, the main index of the Chilean stock exchange, fell by more than 6% and is not so far from losing the 4,000 point barrier. Among the most affected stocks was Banco Santander’s subsidiary, which lost around 6%. Another of the losers is the peso. 

The country’s currency lost almost 4% against the dollar, paid at 874 pesos. The fall is close to 17% so far this year, making it one of the most penalized currencies, only surpassed by the Argentinean and Turkish currencies, in a scenario of electoral polarization.

Finally, the victory of the leftist candidate, who will take office on March 11, 2022, augurs a great change for the economic policies of recent years, as he will increase the role of the State.

 “Market prices had not incorporated that Boric could win with such a wide margin and such a high share,” said Hugo Osorio, deputy director of investment strategy at Falcom Asset Gestión, according to Bloomberg. 

Boric, a former student leader and currently a deputy in the lower house, won 56% of the vote to Kast’s 44% in the presidential runoff election. Before the vote, some unofficial polls had predicted the two candidates to be more evenly matched. Instead, Chileans turned out en masse to vote on Sunday, with more than 8.3 million votes cast, the highest turnout since the return of democracy in 1990.

It is remarkable to see what is happening in Latin America today because historically, never, in any era, in any country, socialists have made any progress.


The Yucatan Times

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