- Chile: Mr. Kast and Mr. Boric moved forward to the runoff, as was largely expected according to polls
CHILE: MR. KAST AND MR. BORIC MOVED FORWARD TO THE RUNOFF, AS WAS LARGELY EXPECTED ACCORDING TO POLLS
On Sunday, November 21, with 100% of the ballots counted according to the Chile’s Electoral Service (SERVEL), right-wing conservative José Antonio Kast (Frente Social Cristiano coalition) and left-wing Gabriel Boric (Apruebo Dignidad Coalition) moved forward to the runoff vote to be held on December 19, as was largely expected. Mr. Kast secured the top spot with 27.9% of votes, while Mr. Boric won second place with 25.8%. In our view, the results will have positive market implications.
SOME TAKEAWAYS:
In Sunday’s presidential election, the right-wing candidates mobilized a significant number of voters (40.7% of the ballots), showing that Chilean voters continue to seek political balance despite recent electoral defeats. The sum of votes for José Antonio Kast and Sebastián Sichel (centre-right) will make a competitive December 19 runoff.
Mr. Boric also moved forward to the runoff, but with less support than expected. Most likely both candidates will need to moderate their programs to capture centre-left votes, mainly Mr. Boric in light of Kast’s advantage.
Mr. Franco Parisi obtained around 12.8% of the votes (third largest share) and will be the great loot to capture. Is expected that centre-left Ms. Yasna Provoste (11.6% of the votes) will support Mr. Boric, while Mr. Sichel (12.8% of the votes) would negotiate with Mr. Kast.
Turnout was 47%, around 7.1 million people, below the last 2020 referendum (51%) and slightly above the elections of last May (45%). A higher turnout for the runoff is expected.
Right-wing coalitions increased their share in both houses in Congress, which will have implications for the constituent process. The election of six new representatives from the Partido de la Gente (Parisi’s party) in the lower house brings in a new dynamic as they will be the key to reach majorities—a swing fraction.
Our market view is that the results of these elections are positive for Chilean asset prices. A solid vote share from the right-wing candidates in the presidential election; the expected moderation of the presidential programs of both candidates to be more competitive in the runoff; and the congressional rebalancing with a greater presence of right-wing coalitions in both houses of the Congress, are enough ingredients to see material positive impacts on the Chilean peso (CLP) and the stock market. The market interest rates should show some decreases.
—Anibal Alarcón
DISCLAIMER
This report has been prepared by Scotiabank Economics as a resource for the clients of Scotiabank. Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Scotiabank nor any of its officers, directors, partners, employees or affiliates accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or its contents.
These reports are provided to you for informational purposes only. This report is not, and is not constructed as, an offer to sell or solicitation of any offer to buy any financial instrument, nor shall this report be construed as an opinion as to whether you should enter into any swap or trading strategy involving a swap or any other transaction. The information contained in this report is not intended to be, and does not constitute, a recommendation of a swap or trading strategy involving a swap within the meaning of U.S. Commodity Futures Trading Commission Regulation 23.434 and Appendix A thereto. This material is not intended to be individually tailored to your needs or characteristics and should not be viewed as a “call to action” or suggestion that you enter into a swap or trading strategy involving a swap or any other transaction. Scotiabank may engage in transactions in a manner inconsistent with the views discussed this report and may have positions, or be in the process of acquiring or disposing of positions, referred to in this report.
Scotiabank, its affiliates and any of their respective officers, directors and employees may from time to time take positions in currencies, act as managers, co-managers or underwriters of a public offering or act as principals or agents, deal in, own or act as market makers or advisors, brokers or commercial and/or investment bankers in relation to securities or related derivatives. As a result of these actions, Scotiabank may receive remuneration. All Scotiabank products and services are subject to the terms of applicable agreements and local regulations. Officers, directors and employees of Scotiabank and its affiliates may serve as directors of corporations.
Any securities discussed in this report may not be suitable for all investors. Scotiabank recommends that investors independently evaluate any issuer and security discussed in this report, and consult with any advisors they deem necessary prior to making any investment.
This report and all information, opinions and conclusions contained in it are protected by copyright. This information may not be reproduced without the prior express written consent of Scotiabank.
™ Trademark of The Bank of Nova Scotia. Used under license, where applicable.
Scotiabank, together with “Global Banking and Markets”, is a marketing name for the global corporate and investment banking and capital markets businesses of The Bank of Nova Scotia and certain of its affiliates in the countries where they operate, including; Scotiabank Europe plc; Scotiabank (Ireland) Designated Activity Company; Scotiabank Inverlat S.A., Institución de Banca Múltiple, Grupo Financiero Scotiabank Inverlat, Scotia Inverlat Casa de Bolsa, S.A. de C.V., Grupo Financiero Scotiabank Inverlat, Scotia Inverlat Derivados S.A. de C.V. – all members of the Scotiabank group and authorized users of the Scotiabank mark. The Bank of Nova Scotia is incorporated in Canada with limited liability and is authorised and regulated by the Office of the Superintendent of Financial Institutions Canada. The Bank of Nova Scotia is authorized by the UK Prudential Regulation Authority and is subject to regulation by the UK Financial Conduct Authority and limited regulation by the UK Prudential Regulation Authority. Details about the extent of The Bank of Nova Scotia's regulation by the UK Prudential Regulation Authority are available from us on request. Scotiabank Europe plc is authorized by the UK Prudential Regulation Authority and regulated by the UK Financial Conduct Authority and the UK Prudential Regulation Authority.
Scotiabank Inverlat, S.A., Scotia Inverlat Casa de Bolsa, S.A. de C.V, Grupo Financiero Scotiabank Inverlat, and Scotia Inverlat Derivados, S.A. de C.V., are each authorized and regulated by the Mexican financial authorities.
Not all products and services are offered in all jurisdictions. Services described are available in jurisdictions where permitted by law.