Habitat Falls as Chile Pledges Changes in Pension

AFP Habitat SA, Chile’s second-largest pension fund manager, fell for a record eighth straight day as the government’s pledge to change the industry spurred speculation that the company’s profits will drop.

Habitat retreated 2.4 percent to 771 pesos at 2:22 p.m. in Santiago, its lowest price since October 2012. The stock has retreated 17 percent in eight days, its longest slump since shares began trading in 1994.

President Sebastian Pinera said in an interview June 19 with Chile’s Radio Cooperativa that he will present before he leaves office a bill that would increase competition among fund managers and ensure higher pensions for retirees. Chile will hold presidential elections Nov. 17, with the winner assuming office in March 2014.

“Political noise is affecting the stock,” Christopher Disalvatore, an analyst at Santiago-based brokerage IM Trust, said in a telephone interview. “We are considering in our models a potential cut in the commissions that the pension funds charge.”

AFP Provida SA, the largest pension fund manager, which New York-based MetLife Inc. agreed to buy in February, advanced 0.1 percent to 2,889 pesos.

Workers in Chile transfer 10 percent of their monthly salaries to individual savings accounts managed by the country’s pension fund managers, which invest in local and foreign securities and draw a commission from salaries, according to the website of Chile’s pension fund regulator.

Chile’s pension fund system was developed in the 1980s by Jose Pinera, a minister of dictator Augusto Pinochet and a brother of President Pinera.