Chile’s IPSA Stock Index Heads for World’s Biggest Monthly Drop

Chile’s benchmark IPSA (IPSA) headed for the biggest monthly loss among the world’s major stock indexes amid tax concern and a tumble in the shares of fertilizer maker Soc. Quimica y Minera de Chile SA.

The IPSA fell 0.2 percent to 3,742.15 at 2:49 p.m. in Santiago and has retreated 7.1 percent in July, its biggest monthly drop since September 2011. SQM dropped 4.9 percent today to 14,962 pesos, extending its loss this month to 27 percent, the biggest since the financial crisis in 2008. The MSCI Emerging Markets Index has climbed 1 percent in July.

“SQM made the fall steeper,” German Guerrero, a partner at brokerage MBI Inversiones, said in a phone interview from Santiago. “Chile was already underperforming other emerging markets in July on concern that the next government will increase company taxes.”

SQM plunged 21 percent in two days as Russia’s OAO Uralkali said it would leave a supply agreement that limited the production of potash, a key fertilizer ingredient, and that underpinned prices.

Former President Michelle Bachelet, who is running on a political platform that includes raising corporate taxes, won a primary election on June 30 to become the main opposition bloc’s presidential candidate. She is leading polls before the November elections.

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

To contact the editor responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net

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