Chile’s assets plunge while the government suffers electoral failure Latin American news

The benchmark stock market closed 9.3%, the biggest drop since the pandemic began in March last year, and the peso fell 2.3%.

Chile’s assets sank when the governing coalition had a surprise for the full assembly in the election, and put the writing of a new letter in the hands of the left.

The benchmark stock market closed 9.3%, the biggest drop since the pandemic began in March last year, and the peso fell 2.3%. In 2030, the yield on Chile’s peso liabilities rose by 22 percentage points to 3.82%.

According to data consulting firm Unholster, government coalition candidates won just 37 of the 155 seats in the assembly to write the new constitution. Competitors who had no ties to any political party won 65 seats. The result means that the coalition authority falls short of the one-third threshold required by the market to block non-compliant clauses in the new charter.

Chileans from left-wing parties have celebrated victory in elections to be held in Santiago over the weekend.

“Constitutional elections for this weekend’s assembly have reminded us that anti-market friends can do very well for left-wing candidates in the post-pandemic period,” said Guido Chamorro of London’s Pictet Asset Management Ltd. company portfolio managers.

The results reflect a growing rejection of traditional parties, exacerbating uncertainty as one of Latin America’s richest nations rewrites its laws after the worst social unrest in a generation. At stake are the rules that helped drive growth over three decades, while at the same time encouraging social dissent and inequality.

Natural resources, pensions and social services will be included in the key points of discussion during the rewriting period. Immediately, the results could give a boost to a bill on pre-Senate copper in the coming weeks that would create one of the heaviest tax burdens in global mining.

“Election results have led to a downward trend in growth this year,” said Sergio Lehmann, chief economist at Banco de Credito e Inversiones in Santiago. “There is greater uncertainty about the economic impact in 2022 and 2023. A highly polarized constitutional process could hurt investment.”

The Radical Left

According to data from the Servel election office, approximately 6.4 million people took part in the elections, with a turnout of 43%. The figure was below the government’s forecast of 7 million votes.

Left-wing and unknown candidates also pulled out an unpredictable chain in local elections. The Conservative mayor of downtown Santiago again lost the election to the Communist Party candidate, and Karina Oliva of the far-left Frente Amplio alliance won the second vote of the governor of the Santiago Metropolitan Region.

Lista Del Pueblo left-wing group Assembly candidates or the People’s List were big winners in this weekend’s vote, according to Cristobal Huneeus, director of Data Science at Unholster in Santiago.

“Human rights, civil society, the environment and the idea that the current economy does not work for the benefit of the people are among the most important issues they reject,” he said.

Going forward, the election results will push candidates for the presidency of left-wing candidates, including deputy Gabriel Boric and Daniel Jadue, mayor of the Recoleta district of Santiago, Huneeus said. Chileans will vote in favor of the next head of state in November.

Clear the signs

Last year, the people completely decided to repeal the current constitution established during the dictatorship of Augusto Pinochet. A key demand from protesters who initially took to the streets in October 2019 was due to a rise in metro fares, before spreading calls for better public services.

Elections were scheduled for early April, but lawmakers voted to postpone it until May, when daily Covid-19 infections and hospitalization reached their highest levels ever. The Constitutional Assembly will now have a year to write a new letter.

Chile may face significant political and economic uncertainties after the rating drops in October 2020, according to an email sent by Fitch Ratings, and the country’s current rating of An has been said to be “very strong”.

Government-backed candidates were not the only ones to receive the blow. Moderate parties such as the Socialists and Christian Democrats and the center-left parties won only 14% of the vote in the Assembly.

“The clearest signs so far are that the right is weaker than expected and that the center has disappeared,” said Jennifer Pribble, an associate professor of political science at the University of Richmond.