Chile stocks hit record high

News of merger talk between Banco de Chile and Citibank powered Chilean stock indexes to record closing highs on Friday. The value weighted IGPA index rose 1.0 percent to 15,118.35 points, while the trade weighted blue chip IPSA index advanced 0.89 percent to 3,470.18 points.
Shares in Banco de Chile, Chile's No 2 bank, rocketed 15.48 percent to 48.50 pesos after controlling shareholder Quinenco said it was discussing a possible alliance with US bank Citigroup. Shares in Quinenco, the holding company of the Luksic economic group, shot up 5.77 percent to 1,110 pesos. Gains by the stocks were decisive in the session's record close.
"Almost everything is because of Banco de Chile," said Sergio Zapata, an analyst with the Banchile brokerage. "I think there's a lot of speculation due to the news that its conversations with Citi are no longer on hold." Other rising bank sector issues included BCI and Santander Chile, up 1.46 percent and 1.41 percent, respectively.
Soquimich, Chile's leading mineral fertiliser exporter and the world's No 1 lithium and iodine producer, saw its shares rise 2.47 percent to 9,130 pesos. Shares of Tech Company Sonda, extended Thursday's gains following news of its acquisition of Brazilian firm Procwork for $118 million, jumping 5.07 percent to 830 pesos.
Zapata said that next week the local market will be looking forward to June inflation data and May economic growth figures (Imacec), scheduled to be reported midweek. "The IMACEC has been subject to a lot of influences, so I think that's the figure people are waiting for," he said.
Chile's economic growth has rebounded from last year's 4 percent, climbing to 5.8 percent in the first quarter of the year. In April, 12-month economic growth was 6.6 percent.
Chilean inflation-adjusted 5-year central bank bond yields fell to 2.93 percent on Friday, from the prior session's close at 2.96 percent. The Chilean peso inched up 0.04 percent to close at 527.30/527.80 per dollar compared with Thursday's close at 527.50/527.80.