Salfacorp Drops to Four-Year Low on Chile Growth: Santiago MoverSebastian Boyd and Eduardo Thomson
Salfacorp SA, Chile’s largest engineering and building company, fell to its lowest level since April 2009 amid concern that profits will be hurt as the country’s economic growth slows.
The shares dropped 2.8 percent to 550 pesos at the close in Santiago, extending their decline this year to 44 percent, the worst performance on Chile’s benchmark Ipsa index.
Salfacorp has tumbled 15 percent since July 1, when the central bank said the Chilean economy will probably expand between 4 percent and 5 percent in 2013, less than the 4.5 to 5.5 percent range it had expected three months earlier. Banks restricted lending to property companies in the first half as construction costs rose and new home sales decelerated, the central bank also said.
“The market is under pressure from the central bank about a slowdown in the economy and speculation on whether there’s a real estate bubble,” Arturo Curtze, an analyst at Vantrust Capital in Santiago, said in a telephone interview. “Cyclical stocks are the first to go down.”
Salfacorp’s shares rose 10 percent on June 25 after its board of directors canceled a planned breakup of the company that would have included the spinoff of its real-estate investment unit.
The Santiago-based company’s stock has dropped 67 percent since the end of 2010, erasing all of its gains after an earthquake that year boosted the Chilean construction industry. During the same period, the IPSA index has declined 23 percent.
Besalco, a Santiago-based construction and engineering company, fell 0.1 percent today, paring its decline this year to 18 percent.