Empresas Hites SA (HITES) and Forus SA (FORUS) led a surge in Chilean retailer stocks this quarter as investors bet the Andes region’s faster-than-average economic growth will boost profit.
Hites advanced 0.9 percent to 560 pesos at 1:31 p.m. in Santiago, bringing its gain this year to 37 percent, as Forus rallied 1.2 percent to 3,319 pesos, leaving it up 23 percent since December. Retail stocks are the top five performers among the 40 members of the benchmark Ipsa stock index this quarter.
“The whole sector is benefiting from positive economic data in Chile and the region,” Juan Pablo Castillo, an analyst at Banco Penta in Santiago, said in a telephone interview. “Inflation is low, growth in Chile is above 5 percent and retail sales are expanding more than gross domestic product.”
Ripley Corp SA (RIPLEY), Chile’s fourth-biggest retailer by market value, has jumped 19 percent this year, while No.1 SACI Falabella (FALAB) has climbed 15 percent and Cencosud SA (CENCOSUD), the country’s second biggest, added 14 percent. Investors are encouraged by Chilean retailers’ plans to expand in Peru and Colombia, where consumer markets are less developed and there’s more room for growth, Castillo said.
Chilean retailers posted a 0.3 percent median decline in earnings in 2012 as companies increased provisions for bad loans, Castillo said. Earnings will grow an average 24 percent this year, according to analyst estimates compiled by Bloomberg.
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