Category: Chile

Chile’s year-on-year growth slowed to 5.5% in September from 5.9% in August as the mining and construction sectors cooled off. Analysts had predicted expansion of 5.8%. The Central Bank says it expects annual growth this year of around 6%, slightly below earlier government figures of 6.2%.

Former Peruvian President Alberto Fujimori has been arrested in Santiago, Chile, at the request of Peru. Fujimori arrived Sunday afternoon from Japan in a surprise visit. He recently confirmed that he plans to run in Peru’s presidential elections due to take place next April. This despite the human rights and corruption charges he faces in that country. Fujimori has been in Japan since resigning his presidency in 2000. Peru has unsuccessfully fought his extradition from there since then.

Peru’s Congress has approved a bill to redraw the country’s maritime border with southern neighbor Chile. The new border will give Peru an additional 37,900 square kilometers of prime fishing waters in the Pacific Ocean. Chile has called the move illegal, something which Peru denies.

Chile has said it will increase the minimum amount of foreign investment in tangible assets and technology from $250,000 to $2.5 million, under Foreign Investment Law DL600. Meanwhile FDI in the first eight months of the year fell by 59% against the same period in 2004. Of the total $2.4 billion invested, over 30% was directed into the mining sector.

Australian electricity company Pacific Hydro Ltd and Norweigan SN Power are planning to invest $1 billion over the next five years in Chile. The money will be directed towards building several hydroelectric plants in the country. Pacific Hydro already owns and operates two plants in Chile. Together with SN Power it is building La Higuera – due on line in 2008 — and is planning to construct three more, all due to be operational by 2011.

The Chilean banking sector saw profits for the first nine months of 2005 rise 14.11% versus the same period last year. Profits totaled 609 billion pesos ($1.15 billion). Banco Santander Chile, the country’s largest financial institution recorded net profits of 182 billion pesos ($340 million).

Chile’s independent Central Bank raised its overnight interest rate by a 25 basis points to 4.25% to control rising inflation triggered by higher oil and food prices. But Central Bank President Vittorio Corbo said inflation will fall early next year. Inflation rose to 3.9% in the 12 months through September, close to the Central Bank’s inflation target range of 2%-4%.

Chile’s Supreme Court stripped former military ruler Augusto Pinochet of immunity from prosecution over tax fraud charges. Prosecutors say Pinochet illegally opened bank accounts overseas. The charges include tax evasion, filing a false tax return and using false passports to open the accounts. In September, Pinochet, who is 89 years old, lost immunity from prosecution in relation to the disappearance of dozens of dissidents during “Operation Colombo” in 1973. He is undergoing further medical tests to determine whether he can stand trial.

Chile’s economic development agency Corfo has added a sixth venture capital fund to the program it initiated this year with a new $28 million fund, Axa Capital Chile, launched in partnership with Axa Private Equity. Axa Capital will target companies in any sector, but preferably those involved in agroindustry with sales between $5 and $25 million. So far this year, Corfo’s venture capital program has raised $120 million in six funds.

Chile’s first football club to list on the stock exchange says it is planning to return soon to the capital markets to raise more financing. Blanco y Negro, the company that runs the club, says it plans to increase its share capital by issuing 25 million new shares worth around $14 million. Blanco y Negro floated on the Santiago Stock Exchange in June when it issued 100 million shares at 184.7 pesos per share. A second club, Union Española, is due to list on the exchange soon.