July 9 (Bloomberg) -- Chilean builders Salfacorp SA and Besalco SA rallied the most in 10 months after politicians agreed to a tax plan that will maintain benefits for homebuyers.
Salfacorp rose 6.2 percent to 465 pesos as of 5:41 p.m. in Santiago, posting the biggest two-day advance since September following yesterday’s 4.2 percent gain. Besalco jumped 7.15 percent after gaining 5.3 percent yesterday.
Finance Minister Alberto Arenas and senators from all major parties yesterday signed an accord that makes sweeping changes to a proposed tax overhaul while still generating an extra $8.2 billion in additional revenue annually. Among the changes, Arenas agreed to reinstate tax credits for newly built homes and remove capital-gains tax for almost all home sales.
Chilean stocks trade at a discount to peers, “which was partly to do with the uncertainty around the tax reform,” said Arturo Curtze, an analyst at Vantrust Capital Corredores de Bolsa SA in Santiago. “The construction sector was the most hit, trading even below 2008 levels because of economic deceleration and the tax reform.”
The IPSA equity index trades at 17.3 times analysts’ earnings estimate for the next four quarters, compared with 17.5 times for Colombia’s Colcap and 20.7 times for Mexico’s IPC.
A report yesterday in Estrategia newspaper that Codelco, the state-owned copper producer, had canceled a construction contract with rival Sacyr SA may have helped lift Salfacorp and Besalco shares, Curtze said. Salfacorp, Chile’s biggest construction company, is rallying after a sell-off that saw it slide to a seven-year low last month.
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