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.
Source Fool.com
