Based on the CRB indices, energy prices have fallen to an all-time low relative to industrial metals. Sure, oil demand has collapsed and storage is near full capacity, but the slope of the oil curve suggests that prices already…
Since February 2018, Chilean stocks in USD terms have fallen more than 50% to their 2008 lows. They now trade at their cheapest cyclically-adjusted P/E ratio since 2003. This cheapness is particularly significant as Chilean and…
The government will ultimately meet the popular demands of protesters, albeit not immediately. We expect Chile to move towards a Welfare State-style of government. Under a Welfare State system, the government prioritizes the…
Highlights Chile is undergoing a paradigm shift from a neoliberal economic model to a Welfare State. It will not be a smooth transition, as the political and business elites are resisting such a transformation. Indeed, protesters…
Highlights Analysis on Chile is available below. EM local bond yields have decoupled from their traditional macro drivers. This could be a sign that EM domestic bonds are entering a New Normal. We refer to a New Normal for EM local…
The latest violent protests in Chile have raised doubts about its socio-political and economic stability. As a result, Chilean share prices could be facing both absolute and relative (versus other EM bourses) de-ratings. We are…
Analysis on Chile is available below. Highlights Major equity leadership rotations normally occur around bear markets or corrections. Hence, a major broad selloff will likely be a precondition for EM, commodities, global cyclicals…
Chart II-1Our Strategy For Chile We have been betting on sluggish growth, lower interest rates and a weakening currency in Chile. These positions have panned out well as the economy has slowed considerably, local bond yields…
Dear Client, Tomorrow we will publish a debate piece on China shedding more light on the ongoing discussions at BCA on this topic. This report will articulate the conceptual and analytical differences between my colleague, Peter Berezin…