Habitat Gains in Chile After BCI Calls Slump Excessive

Administradora de Fondos de Pensiones Habitat SA, Chile’s second-largest pension fund manager, rose the most in six weeks after Banco de Credito e Inversiones said its slump in the last three weeks was an overreaction.

Habitat advanced 2.8 percent to 730 pesos at 1:34 p.m. in Santiago, the biggest gain on a closing basis since May 22. The IPSA benchmark index rose 0.4 percent.

Santiago-based Habitat’s shares fell 23 percent from June 17 through yesterday. Chilean President Sebastian Pinera said June 19 in an interview with Radio Cooperativa that he will submit a bill to Congress before his term ends to increase competition among fund managers and assure higher pensions for retirees. Chile will hold presidential elections Nov. 17, with the winner assuming office in March 2014.

“Even as the political uncertainty may remain, there haven’t been any changes to the company’s cash flow that justify current prices,” BCI said in a report to clients dated today. “The market has overreacted, which creates an attractive entry point.”

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.

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