Habitat Falls in Chile After Larrain Vial Cuts to Sell

AFP Habitat SA (HABITAT), the second-largest pension-fund manager in Chile by assets, headed to its lowest closing price in almost a month after the country’s biggest broker said the stock was expensive and told clients to sell.

Habitat retreated 2 percent to 885 pesos at 1:40 p.m. in Santiago, after falling 1.1 percent yesterday, when the broker Larrain Vial SA issued its report. The stock is down 4.3 percent in January after surging 47 percent in 2012.

Larrain Vial, which previously rated the shares a buy, said the loss of customers in Chile to competitors including AFP Modelo may offset any growth that comes from an expansion into Peru. The shares should fall to about 800 pesos, Larrain said. That’s almost 10 percent lower than today.

“Though we’ve incorporated higher valuation multiples and we see Habitat’s entry to Peru will add value, these positive factors don’t compensate for the current price,” analysts Javier Pizarro and Florencia Stefani said in the note.

Habitat shares gained 27 percent in the last two months of 2012 as investors revalued the company based on the terms of Des Moines, Iowa-based Principal Financial Group Inc. (PFG)’s pending acquisition of rival AFP Cuprum (CUPRUM) SA, which is based in Santiago.

In December, Habitat received a license to operate in Peru and was awarded in Peru a license to sign up new employees entering the country’s private pension system for the next two years after offering to charge a lower commission than rivals.

Habitat had 19.7 trillion pesos ($41.7 billion) in assets under management as of Nov. 30, according to data from the country’s pensions regulator.

To contact the reporter on this story: Eduardo Thomson in Santiago at ethomson1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net