ITCB - Why Chilean Stocks Are Crashing Today
Chilean stocks were in free fall this morning, with shares of electric utility Enel Chile (NYSE: ENIC) down 8.1%; regional bank Itau Corpbanca (NYSE: ITCB) falling 8.6%; Banco de Chile (NYSE: BCH) dropping 9%; and Banco Santander-Chile (NYSE: BSAC) suffering worst of all, down 10.9%. Basically, if it has "Chile" in the name, it's having a bad day today.
Image source: Getty Images.
As Reuters reported this morning, candidates from Chile's ruling center-right coalition failed to win one-third of the seats in a vote to form a new body that will rewrite Chile's constitution. With 90% of votes counted, independents are likely to control a majority, while candidates backed by President Sebastian Pinera's center-right Chile Vamos coalition won only about one-fifth of the seats. Changes to the constitution can be passed with a two-thirds majority. Therefore, Chile Vamos needed to win at least one-third of the votes cast to be certain that it could block any constitutional changes that would be deemed "radical" (i.e., unfriendly to corporations). And it didn't get those votes.
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Why Chilean Stocks Are Crashing Today