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Chile

Ten Reasons to Invest in Chile

After Brazil, Chile is the one of the attractive destination for overseas investors.  While Chile’s economy is primarily a commodity-based economy, there are many other factors that favor Chile.

From a recent report by OECD:
“Chile has managed the crisis better than other small open economies ,” said OECD Secretary-General Angel Gurría. “Thanks to sound fiscal policies and good monetary policy management during the boom years, there was room for decisive stimulus measures which are now proving their worth.”

The following are some of the reasons to invest in Chile:

1. Chile is on its way to become the 31st member of OECD
2. The economy is expected to grow 4.1% this year and 5.0% in 2011
3. Chile has low debt
4. In 2009, Chile was number 5 in the Economic Freedom of the World Report, ahead of the U.S.
5. Corruption is very minimal
6. Chile has a liberal capital market and stable financial system
7. Follows free trade economic policies
8. Last month, Sebastian Pinera, the country’s first democratically elected conservative leader in more than half a century was elected
9. Chile is the largest producer of copper in the world
10. The Total Government Expenditure is low

The easiest way to invest in Chile is via the iShares Chile ETF (ECH). Financials constitute under 10% in this ETF. The fund has an asset base of $380M and has 32 holdings. Another way to invest is to pick some of the Chilean ADRs trading in the US markets. The list of Chilean stocks can be found here.

Banco de Chile Announces Stock Dividend

At a special shareholders meeting on March 29th,2009 a stock dividend of 3.2325% was approved. Banco De Chile ADR (BCH) shareholders will receive 3.2325 additional shares for each 100 shares held. Fractional shares will be paid in cash.

According to Depositary, JPMorgan Chase Bank, N.A. the effective dates are as follows:

ADR record date: May 29, 2009
ADR payment date: June 11, 2009

Banco De Chile ADR (BCH) currently has a dividend yield of 5.91% and has a market cap of 5.4B. In March of this year, Fitch Affirmed its ratings outlook as stable.

Another Chilean bank that trades in the NYSE is Banco Santander-Chile (SAN).

Chilean ADR Stocks !!

Chile is a mineral rich country. Chile is the world’s biggest exporter of Copper. The country was ruled by the military dictator Augusto Pinochet from 1973 to 1990. During this time, many of the state owned firms were privatized under the guidance and advise of a team of economic experts who had earlier studied in the University of Chicago (known as the “Chicago Boys”). Due to the economic foundation created by them and the following governments, Chile is now a prosperous and stable country in South America.

There a 17 Chile stocks available as ADRs. Some of the stocks such as Lan Chile, Banco de Chile are great performers.

The following is the list of Chilean ADRs: