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Kast’s win over Boric gives assets a break in the short term. But experts expect high levels of uncertainty and volatility in the exchange rate and in the Stock Market to return.

The results of the first round of the presidential elections that took place yesterday surprised many, including market analysts.

According to them, the triumph of candidate José Antonio Kast over Gabriel Boric meant a respite for Chilean assets, at least until the second round.

“There is the expectation that Kast can make fewer changes in the short term and the market celebrates that,” says the manager of Income Studies4, Guillermo Araya.

“While Kast’s program in economic terms has received criticism, it is perceived as more market-friendly than Boric’s, which would partially favor assets,” adds Bice Inversiones chief economist Marco Correa.

So how will the dollar react against the Chilean peso this Monday? There are no two views on this, as a sharp drop in the exchange rate is expected.

In Araya’s case, he expects the US currency to drop to $ 800, from $ 832.70 with which it ended on Friday.

For his part, the Head of Capitaria Studies, Ricardo Bustamante, foresees that it will reach levels of between $ 805 and $ 815. The above, he says, “considering the optimism that would exist in the market, which would begin to speculate with economic policies that boost growth and attract investment back to the country. “

Increase of up to 5% for the IPSA

For the Stock Exchange, the outlook will also be very favorable this day.

“Kast gets a slightly higher percentage than expected, and during the last month an important recovery was observed in the Chilean stock market, following the results of the surveys that predicted an important result for Kast that, if he became the next President, could balance a bit of the political spectrum “, explains the assistant manager of Local Equity at Bice Inversiones, Aldo Morales.

In that sense, the chief economist of Scotiabank, Jorge Selaive, expects an IPSA growth of between 3% and 5%, as published on his personal Twitter account.

For Araya, the expansion figure for Chile’s main stock index would be similar, with figures varying between 3.5% and 5%.

Uncertainty

For specialists, although the immediate reactions would be positive on the part of the market in the short term, what comes until the second round is uncertainty and volatility, like those seen last week.

“This result should return to high levels of uncertainty, because the second calculation is regarding the distribution of the votes of the candidates who did not go to the second round, especially with the votes of Franco Parisi. That will generate a lot of uncertainty” , He says.

The CEO of the global investment platform Altafid, Vito Sciaraffia, points out that, in the medium term, local investors will once again take refuge in the dollar and volatility will be observed in the Chilean peso and local assets, which, he points out, will be punished.

“The two candidates who go to the second round represent political extremes, which does not help to reduce the uncertainty and nervousness of investors. Furthermore, the new composition of Congress, added to the constituent process, will generate governance problems regardless of who takes office. as president next March, “he says.

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