Peru, Chile and Colombia equity markets lead global rally in 2022
RIO DE JANEIRO, BRAZIL – Markets are having their best year since 2017, up more than 10%, supported by the rally in commodity prices and a greater safe haven in the region due to the geopolitical conflict in Ukraine.
In just three months, some equity markets worldwide are up nearly 1%, with Latin American markets leading the way.
Read also: Check out our coverage on Peru
The Lima Stock Exchange stands out on the podium of the list with an 18% annual increase that takes the S&P/BCL Peru above 25,000 points.
It is followed by Chile’s IPSA, up 12% to 4,854 points, and Colombia’s COLCAP, up 9% to 1,542 points.
For both the Peruvian and Chilean stock exchanges, this would be the best year since 2017, when they rose more than 20%, while the Colombian stock exchange would experience its best period since 2019.
“There are several factors for the rise of the Chilean, Peruvian and Colombian stock markets. The first is the risk appetite in a scenario of international volatility due to the Russia-Ukraine conflict. This has led to a search for assets like those in Latin America,” explains Andrés Cáceres, senior strategist at broker Bci Andrés Cáceres.
Jorge Tolosa, equity trader at Vector Capital, explains that the increases are taking place in a scenario of high uncertainty, marked by higher inflation in the region, currency devaluation, and political processes such as presidential elections.
“In countries like Colombia and Brazil, elections are coming up, and the next few months will be determined by the political orientation of the future ruler,” he explains.
“In the case of Peru, the doubts today are not from an economic point of view, but rather whether the current president will be deposed or remain in office, and if he remains in office, what strength or support he can ultimately count on,” the analyst adds.
As for Chile, the market has already reduced its political uncertainty after the new government under Gabriel Boric took office. From now on, all eyes will be on the Constitutional Convention.
THE KEY TO MOMENTUM
According to market analysts, the key to the rise of stock markets in the Andean region is the excellent performance of commodities.
The best performers in the Chilean index were CAP (45%) and SQM-B (41%), which are mainly linked to iron and lithium production.
In Peru, gains were led by copper and tin miner Minsur (54%), along with Sociedad Minera El Brocal (53%) and Volcan Compañía Minera Series B (46%).
In the Colombian index, the best performance is led by the shares of Grupo Nutresa (54%), linked to food processing, followed by Grupo Bolivar (30%) in the financial sector and Ecopetrol (22%) on the oil side, which has surpassed the US$100 per barrel mark with an annual increase of almost 40%.
However, if the conflict in Ukraine ends, the recovery in developed equity markets could lead to further outflows from emerging markets, Cáceres said.
“More aggressive monetary policy and interest rate hikes above market expectations could lead to safe-haven assets in markets like the U.S. to the detriment of markets like Latin America,” he adds.
Live Market IntelligenceBrazil — Live Market Board
Rio Times · Live Market Intelligence
Brazil — Live Market Board
-1.52%
173,885.34
-1.52%
67,304.62
+0.18%
10,879.65
-0.77%
3,233,105
-0.71%
2,304.68
+0.15%
57,237.60
—
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 173,885.34 | -1.52% | +31.01% | 176,564.75 | 176,564 | 173,885 | — |
| USD/BRL | 5.12 | -0.08% | -8.18% | 5.12 | 5.12 | 5.10 | — |
| SELIC | 14.25% | — | — | — | — | — | |
| PETR4 | 42.00 | +1.92% | +29.47% | 41.21 | 42.40 | 41.75 | 31,398,800 |
| VALE3 | 75.05 | -0.85% | +36.90% | 75.69 | 76.20 | 74.61 | 12,244,500 |
| ITUB4 | 41.82 | -2.43% | +24.24% | 42.86 | 42.73 | 41.82 | 20,433,100 |
| BBDC4 | 18.35 | -2.24% | +19.08% | 18.77 | 18.66 | 18.35 | 22,354,700 |
| BBAS3 | 20.78 | -0.24% | +4.16% | 20.83 | 21.06 | 20.46 | 14,676,500 |
| B3SA3 | 15.32 | -4.25% | +20.54% | 16.00 | 15.97 | 15.32 | 51,719,300 |
| ABEV3 | 15.90 | -1.24% | +20.55% | 16.10 | 16.23 | 15.90 | 37,696,600 |
| WEGE3 | 45.64 | -2.27% | +24.77% | 46.70 | 46.68 | 45.33 | 6,441,500 |
| PRIO3 | 58.41 | +2.89% | +39.17% | 56.77 | 59.08 | 57.90 | 9,652,400 |
| SUZB3 | 42.30 | -1.86% | -18.42% | 43.10 | 43.31 | 42.23 | 11,321,100 |
| RENT3 | 37.44 | -2.42% | +5.55% | 38.37 | 38.20 | 37.11 | 7,093,300 |
| AZZA3 | 16.15 | -5.83% | -54.70% | 17.15 | 17.23 | 16.12 | 2,878,400 |
| CSNA3 | 5.20 | -7.80% | -35.08% | 5.64 | 5.62 | 5.20 | 20,157,400 |
| GGBR4 | 24.79 | -1.39% | +48.35% | 25.14 | 25.29 | 24.63 | 8,310,000 |
| ENEV3 | 25.87 | +0.08% | +92.06% | 25.85 | 26.37 | 25.61 | 10,382,900 |
Read More from The Rio Times