Category: Chile

Chilean copper workers at Codelco, the world’s largest copper mine, yesterday, Wednesday, agreed to delay strike action to discuss a wage bonus with government officials. Workers are keen to see a share of the windfall from this year’s record copper prices.

ABN AMRO Chile has sold its life insurance business to local company EuroAmerica Seguros de Vida SA. The bank sold its portfolio of general insurance policies in November to local insurance firm Aseguradora Magallanes, owned by Nalac. This latest sale completes the Dutch bank’s exit from Chile’s insurance industry.

BBVA Chile, an affiliate of the Spanish bank, has issued local bonds worth $42 million (UF1.2 billion). The bonds are denominated in Unidades de Fomento, the Chilean inflation-linked currency unit. BBVA had originally planned to issue double that amount (UF2.7 billion). The instrument carries a maturity of 22 years and an interest rate of 5.17%.

Empresa Nacional de Electricidad SA (Endesa) is to build four hydroelectric plants in Chile between 2008 and 2018 to meet the country’s growing energy needs. The projects will cost $3.5-4 billion and will involve damming two rivers, something that has sparked conflict with environmentalists.

Chile’s central bank yesterday, Tuesday, kept its benchmark lending rate at 4.50% citing a calmer inflationary environment. This is the first time in five months the central bank has not raised interest rates. Inflation in the 12 months to November was 3.6%, down from 4.1% in October, driven by lower fuel prices and a stronger peso.

Michelle Bachelet and Sebastián Piñera will face each other in Chile’s second-round run-off presidential elections on 15 January. Bachelet, a former defense minister and ruling party candidate, gained just under 46% of the vote in Sunday’s elections, below the 50% which would have meant a first-round win. Her opponent, centre right Sebastián Piñera, representing the National Renewal Party, gained just over 25% of the votes. Should Bachelet win, she will become Chile’s first female president.

Chile was set for a run-off second round election next month after no candidate won more than 50% of the vote in Sunday’s elections. The results after counting just over 10% of the votes gave Bachelet the lead with 44.76%; followed by Sebastián Piñera (National Renewal Party) with 26.73%; Joaquín Lavín (Democratic Independent Unity) with 23.52% and far-left candidate Tomás Hirsch with 4.96%. The favorite to win is Michelle Bachelet, former defense minister and ruling party candidate, who would become the country’s first female president. She will face either Joaquín Lavín or Sebastián Piñera in the second round on 15 January. Sunday’s elections saw a high turn out as Chileans voted to elect all 120 members of Congress and 20 out of 38 senators, as well as their next president.

Chile’s largest sewage and drinking water firm, Aguas Andinas, is planning to issue up to $232 million worth of bonds in the local market. Aguas Andinas, which is owned by Spain’s Aguas de Barcelona (Agbar), will issue up to UF1.6 billion of ‘reajustable’ or inflation-linked bonds with a seven-year maturity. The company said it is also planning to issue a UF5 million 21-year inflation-linked bond at a later date.

Consumer prices fell in November in Chile by 0.2% and inflation in the 12 months to November stood at 3.6%. The strong peso and lower fuel prices have pushed up imports and increased domestic competition. The central bank is expected to keep interest rates unchanged this month, as a result of the lower inflation figures.

Chile’s GDP expanded at a slower rate in October than in the previous two months as mining production dropped. Year-on-year growth was 4.9%, compared with 5.4% in September. Analysts say it is likely that with a fall in consumer prices last month, the central bank will not raise interest rates in December. This would be the first time since July that rates remained unchanged.