Rising copper prices and a weakening U.S. dollar may have supported a rebound in Chile’s equity market. Copper prices have gained over 7% since the mid-January lows. The base metal is a major export and is a driver of government revenue. [How Copper Affects the Chile ETF]
Additionally, Chile’s economic activity grew more than analysts expected in December, led by services, Bloomberg reported. The Imacec index, a proxy of gross domestic product, increased 1.5% year-over-year, compared to forecasts of 0.9%. The economy expanded 0.8% month-over-month and wages gained 5.2% year-over-year.
Chilean economy also benefits from the low oil environment as the country is a heavy importer of energy, reports Kabir Sehgal for TheStreet.
Sehgal also pointed out that Chile’s market looks cheap at a forward price-to-earnings ratio of 13, or below its historical 10-year average. ECH is trading at a 13.96 P/E ratio.
Max Chen contributed to this article.