A strong appreciation of all local assets. That is the conclusion of the experts after the Rejection option achieved a broad victory that exceeded 60% of the votes.
“The IPSA should rise between 7% and 10% and the dollar should fall $20 to $30 due to the magnitude of the victory,” he says. Manuel Bengoleaoctagon member.
Already on Friday the market had internalized a victory for the Rejection option, which led the IPSA to close with the highest rise in 10 months, climbing 4.53% on the day and reaching over 5,600 points. In fact, it was the Stock Market that recorded the highest rise in the world measured in dollars on Friday, with an increase of 5.91%.
In that line, arthur freigeneral manager of Renta4 Corredores de Bolsa, points out that “although prices had internalized the triumph of rejection, the surveys gave an advantage that still allowed speculation. A moderate victory was going to have an impact on prices, but now a loose victory will deepen the impact, that should be seen in the IPSA and in the dollar”.
In this regard, Frei details that “the impact could be practically 50% more than we expected, with the Rejection we expected between 4%-5% rise in the IPSA, but now we expect it to be closer to 7% in the first 5 days, and leave the selective around 6,000 points”.
According to Bengolea, what will support the rise in the local stock market is that the Rejection is “a process that will lead to a good Constitution and that is given by the amplitude of the triumph. The probability of refounding the country has vanished.”
Klaus Kaempfe, regional director of Portafolio Solutions at Credicorp Capital, points out that “we will have a good reaction from risk assets, with the dollar falling, the IPSA rising very strongly, especially in the most cyclical and regulated sectors. The normal thing is that 80% of the movement occurs on the first day, then we have some volatility and then a consolidation. one could expect a rise of between 5% and 10% in the week”.
More about referendum 2022
Meanwhile, the dollar market will see a strong impact on Monday. On Friday, the exchange rate closed at $879.17, a drop of $14.71 for the week, internalizing the Rejection’s triumph. But the breadth of the vote could deepen the variations. According to frame strapchief economist of BICE Inversiones, “we would see an appreciation of the Chilean peso, which should be in the range of $830 to $850 during the week, and if the external scenario stabilizes, this appreciation could be even greater.”
Fynsa’s chief economist, Nathan Pincheira, says that “most likely we will have a type of sharp movement, both in the exchange rate and in the stock market. However, this could be exacerbated, because although the market was expecting something, it was not so convinced (of the victory of the Rejection) and I think that a much narrower result was envisioned than what we are seeing so far. Most likely, we will see an exacerbated movement in the early hours of tomorrow, but then it will take some awareness or normalize.
Philip Ruizeconomist at BCI Estudios, comments that “for the medium term, given the result, we raise the probability of a positive economic scenario that incorporates an exchange rate in the $800-850 range by the end of the year”, although he notes that “we maintain the vision that the exchange rate would remain at high levels, given the important macro imbalances still in force”.
Martina Ogazeconomist from EuroAmerica, maintains, for his part, that given the broad victory, “very likely the exchange rate will appreciate significantly tomorrow, in line with what we saw on Friday. I estimate that the parity will consolidate levels below $850, I even do not rule out that during the week it will approach levels closer to $800, which in the medium term seem to me to be consistent levels under the current economic scenario”.
Sergio Godoy, an economist at STF Capital, points out that “the dollar as a shock effect tomorrow should fall to levels close to $810-$820. However, in order for this trend to continue, a political negotiation process must be initiated that leads to a new, more expeditious constitutional process, which allows us to have a new plebiscite, where there is a majority approval of the new constitutional proposal.”
Regarding fixed income, Correa points out that “we would see a drop in the short term in local interest rates, boosting the funds of this asset class. For reference and based on comparable episodes, we could see a drop of around 30 basis points in the first week. In any case, it must be understood that other fundamental factors that affect rates will not change regardless of this result, such as inflation or monetary policy trajectory (in particular, we will have a meeting of the Central Bank of Chile next week)”.