Chile and Colombia Stocks

I’m putting both of those into this one posting since neither is very big. Brazil is big, so can’t quite be shoehorned in here.

There are ADRs and ETFs for both countries plus there is an “Andean 40″ ETF that has a variety of country’s stocks in it. Chile has two ETFs / Funds. ECH and CH. The Columbia ETF is GXG while the Andean 40 is ANDE. These folks claim there are three Bolivian ADRs, but all of them look to be inactive.
https://www.adr.com/Markets/CountryProfile?code=BOL

BANCO BISA SA	 	OTC
BANCO MERCANTIL	 	OTC
BANCO NACIONAL 	 	OTC

The Columbian ADR ticker list comes from:
http://www.site-by-site.com/adr/latin/adr_col.htm

While the Chile ADR tickers come from:
http://www.site-by-site.com/adr/latin/adr_chi.htm

A list of the holdings of AND are here:

http://finance.yahoo.com/q/hl?s=AND+Holdings

At this time it lists:

Name 	 			Ticker	% Holdings
Ecopetrol S.A. American Deposit	EC	9.07	Colombia
Southern Copper Corporation Com	SCCO	5.71	Peru
Credicorp Ltd. Common Stock	BAP	5.20	Peru
Buenaventura Mining Company Inc	BVN	4.74	Peru
Pacific Rubiales Energy Corp.	PEGFF.TO 4.55	Colombia via Canada
LATAM Airlines Group S.A.	LFL	4.51	Chile
Empresas COPEC SA	        COPEC	4.02	Chile (pulp)
S.A.C.I. Falabella	        FALABELLA 3.98	Chile
BanColombia S.A. Common Stock	CIB	3.77	Colombia
Sociedad Quimica y Minera S.A. 	SQM	3.74	Chile

A fairly nice and well thought out list, IMHO.

AND and the parts inside of it (note that BVN is a ‘color repeat’ of gold and is the line on the bottom with the big drop at the end)

AND Andean Fund and selected holdings with RSI, MACD DMI

AND Andean Fund and selected holdings with RSI, MACD DMI

Generally it looks to me like a good set to choose from, or just get AND. Pruning the bottom 3 or 4 tickers is always a temptation, but that opens the risk of leaving out the things with the cheapest valuation and best chances for a rise in a recovery. It takes more active management and watching for when they ‘pick up’ to put them back in. One expects the fund manager to vary the “how much” they hold as a way to do that very job, so to some extent you are betting that the fund management is not so smart and not doing their job as often as you would do it. Usually not valid expectations.

This next chart has AND on it, along with two Chile funds (one closed end – so can sell at a discount or premium to net asset values). There is also a Colombia ETF GXG and the Latin 40 Majors fund ILF and SPY the US S&P 500 for benchmark comparisons. I made this chart ‘extra big’ so the tickers were not covered by the plot of lines, but that makes all the marks smaller. You will likely want to click on it to get a bigger version.

ECH Chile fund vs ILF Latin 40, SPY S&P 500, AND Andean fund, and others.  RSI, MACD, DMI

ECH Chile fund vs ILF Latin 40, SPY S&P 500, AND Andean fund, and others. RSI, MACD, DMI

ECH  -  Chile ETF
ILF  -  Latin 40 Majors
SPY  -  S&P 500 benchmark
CH   -  Chile Closed End Fund
AND  -  Andean 40 fund
GXG  -  Columbia ETF
BGA  -  BANCO GANADERO
CIB  -  BanColombia S.A

Other than RSI ‘near 80′, a nice looking set of indicators. Colombia GXG and Andean 40 AND more or less being an S&P 500 match (but “OOTUS” Out Of The U.S.). CH is selling at a 1.7% discount to net asset value per Aberdeen, the fund manger, here:
http://www.aberdeench.com/aam.nsf/usClosedCh/prices
BGA and CIB are two Colombian banks and the only Colombian ADRs from the list that show up in BigCharts. EC (prior chart) is a Colombian ADS that shows up in Bigcharts, but was not on the list. Go figure…

At this point, it looks like Colombia and AND Andean 40 fund both go on the “good” list. (Though not a ‘buy here’ indication at the moment, so likely need to wait for a ‘dip’ to buy.)

These tickers are listed as Colombian ADRs, but do not show up in Bigcharts so are most likely inactive:

Name 	 	 	 	 	CUSIP 	   Market Ticker
CARULLA & CIA. PREFERRED SHARES 144A    146794102  144A   CCIAYP
CEMENTOS DIAMANTE S.A. 144A 	 	151261104  144A   CGLOY
CEMENTOS PAZ DEL RIO, S.A. 144A 	151264108  144A   CMNZYP
COMUNICACION CELULAR, S.A. 	 	205847106  OTC    CMCQY
CORPORACION FINANCIERA DEL VALLE 144A 	219869104  144A   CFVLY
CORPORACION FINANCIERA DEL VALLE LVL-I 	P3138W127  OTC    CFDVY
GRAN CADENA DE ALMACENES COLOMBIA 144A 	385003108  144A   GCACYP
OCCIDENTE Y CARIBE CELULAR, S.A. 	674608302  OTC    OYCCY

Which just leaves individual Chile ADRs. There’s a long list, but many of them are likely to be inactive or very low volume. The entire list is:

Name  	 	 	 	 	CUSIP 	   Market Ticker
AFP PROVIDA COMMON SHARES 	 	00709P108  NYSE   PVD
BANCO BHIF "G" SHARES 	 	 	05946H108  NYSE   BB 
BANCO DE A. EDWARDS 	 	 	059504100  NYSE   AED 
BANCO SANTANDER CHILE 	 	 	05965F108  NYSE   BSB 
BANCO SANTIAGO 	 	 	 	05958L105  NYSE   SAN 
CHILECTRA S.A. 	 	 	 	168884104  OTC    CLRAY
CHILQUINTA, S.A. 144A 	 	 	169255106  144A   CQNAY
COMPANIA CERVECERIAS UNIDAS S.A. 	204429104  NAS    CCUUY
COMPANIA DE TELECOM. DE CHILE "A" SHARES 204449300 NYSE   CTC 
CRISTALERIAS DE CHILE, S.A. 	 	226714103  NYSE   CGW
DISTRIBUCION Y SERVICIO D & S S.A. 	254753106  NYSE   DYS
DISTRIBUIDORA CHILECTRA METROPOLITANA SA 25475H105 144A   DCM144A 
EMBOTELLADORA ANDINA, S.A. "A" SHARES 	29081P204  NYSE   AKOA
EMBOTELLADORA ANDINA, S.A. "B" SHARES 	29081P303  NYSE   AKOB
EMPRESAS TELEX-CHILE COMMON SHARES 	29245D105  NYSE   TL 
ENDESA-EMPRESA NACIONAL DE ELECTRICIDAD 29244T101  NYSE   EOC
ENERSIS S.A. 	 	 	 	29274F104  NYSE   ENI
GENER S.A. 	 	 	 	368731105  NYSE   CHR
LABORATORIO CHILE S.A. "B" SHARES 	50540H104  NYSE   LBC
LAN CHILE S.A. 	 	 	 	501723100  NYSE   LFL
MADECO COMMON SHARES 	 	 	556304103  NYSE   MAD
MASISA S.A. 	 	 	 	574799102  NYSE   MYS
QUINENCO S.A. 	 	 	 	748718103  NYSE   LQ 
SANTA ISABEL  	 	 		802233106  NYSE   ISA
SOCIEDAD QUIMICA Y MINERA DE CHILE "B" 	833635105  NYSE   SQM
SUPERMERCADOS UNIMARC COMMON SHARES 	868453101  NYSE   UNR
VINA CONCHA Y TORO COMMON SHARES 	927191106  NYSE   VCO

As there are so many of them, I’m just going to put in a chart of the tickers, for those that show up on BigCharts, and not have much commentary. There is also a (long) list of those that do not show up or that map to a different company. (An all too common problem in BigCharts, especially for foreign or “pink sheets / OTC” stocks and tickers.)

Selected Chile ADRs vs SPY

Selected Chile ADRs vs SPY

Only 3 tickers beating the S&P 500 and at much more risk. Likely not worth it for individual company stocks / ADRs unless you find that a particular company has something very special going on.

Tickers that are not in BigCharts:

aed (different company) 
bb  (different company) 
bsb (different company)
ctc (different company)
clray 
cqnay 
ccuuy 
dcm144a 
tl
cgw (different company)
dys 
chr 
lbc (different company)
mad
mys
lq
isa
unr

For tickers that do not show up in Bigcharts, it is likely that they were discontinued from listing during the market collapse, or that they had a change of ticker. While I ought to search each company name for a new ticker, just to be sure, it’s late and I’m not seeing that as a priority right now.

In Conclusion

That pretty much wraps up our tour of South America ex-Brazil. There are “things of interest”, to be added to the ‘preferred watch list’ especially for “OOTUS” positioning. Colombia has gotten much of their drug cartel induced government instability out of the way. Chile and Peru are driven by strong demand for resources and minerals, especially copper, so will be sensitive to economic downturn and “risk off” trade decisions by major traders and hedge funds. In particular there are a couple of nice diversified funds with active management: AND, GXG, and ECH that look to give a nice diversified and rising set of choices. South America accounts for nearly 1/3 of all copper production and SQM is one of the few miners of lithium, so are important to “tech” products and both houses and cars (especially electric and hybrid cars).

All in all, it looks like there are still some reasonable places to park money in South America. Just keep an eye on the elections and avoid any country looking to try, yet again, for the Socialist Workers Paradise and the Socialism Shiny Thing…

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
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6 Responses to Chile and Colombia Stocks

  1. jim2 says:

    While the countries do have signficant differences, if a stock market crash occurs, they will all fall.

  2. adolfogiurfa says:

    jim2 if a stock market crash occurs, they will all fall. See my comment in “Peruvian stocks”.
    That of course happens in a “formal” (and cheated) economy…

  3. E.M.Smith says:

    @jim2:

    The market aphorism is:
    “When the cops come they take the good girls out with the bad.”

    Been true forever.

    Since the USA has historically been the largest market, that is also why I watch SPY as a benchmark. When the USA is tanking, the others tend to follow. (Occasionally they lead the turn down, so I watch for ‘disconnects’ between the markets as well).

    However, if it isn’t a hard global crash, but just a relative problem, market differentials show through. Look at Peru vs Argentina over the last 2 years. Peru the clear winner. Look at Brazil vs the USA during the crash. Brazil when down way more. So there are two things you can do. A “long/short” hedge ( so, for example, long Mexico short Brazil ) picking up the differential behaviour between the two. Or just going long the better market when timing says “go long” and shorting the bad one when timing says “be short”.

    In a hard crash, indicators will say to be out anyway; so not a big risk to be in while the going is good. Notice that one some of these I’ve said “they look good but wait for a dip” (more or less) or “looks good but a bit toppy”. What I’m doing here is finding candidates that look better than their neighbors. Then you wait for a buy indication. Sometimes weeks. Sometimes months or even years. Volume spike on decline. Volatility spike too. Wide price bars (same thing as high volatility). RSI either down from ‘near 80′ to ‘near 50′ (if a dip in a nice running stock) or from ‘near 80′ down to ‘near 20′ if after a long decline from a top inflection and “bottom picking” a trend reversal. MACD with a crossover to “blue on top” (and near or above zero for a “dip” or below zero if a “trend reversal from a fall”). DMI / ADX lags, but ought to have ADX over 20 something and DMI+ inflected up for a “dip” or ADX headed way down on a “bottom” as the high value in the plunge dissipates and DMI- headed down with DMI+ headed up to a crossover to “blue on top”. (Much easier to see on a chart than to describe in words…)

    So yes, in a hard global crash they all fall. But one ought to be exiting at the top anyway when things ‘go flat’ or invert. And in a non-global softening non-crash, good countries just out perform. Or even more important, as some countries have elections to admire “The Socialism Shiny Thing”, they crash while their more sober neighbors rise. (“Watch this space” as Italy has an election “real soon”…)

    As a “particular”, look at that nest to last chart (of ECH). Notice that the end of the rise has “gone flat” a little? That the price bars / line is ‘getting thin’ at the right end? (volatility dropping). RSI was “at 80″ a month back and is now “near 80″ so very slight, but “lower highs”. Implies a “dip” soon. MACD is well about zero and in a generally “going sideways” form, but drifting down, likely to “drift faster” and could easily turn down in a ‘dip’. That just leaves ADX / DMI as a strong positive indicate (but it runs a bit later than other indicators). Watch that black ADX line. It is ’rounding over’ (though not yet flat). As soon as it is inflected to down (at which time the DMI+ blue line ought to dip down and the DMI- line ought to inflect up) that confirms the “dip”.

    So I’d not buy ECH now, I’d put it on a “watch list”. Then buy it “in the dip”. This avoids taking the loss of the “dip” and lets the money be used somewhere else while I wait. Furthermore, as the “dip” often retraces a few months worth of rise in a week or so, when you ‘buy the dip’ you gain that amount to time as well. So you can effectively capture 5 or 6 months of “rise time” just by waiting for the “dip” to buy. ( The time in the rise that is then lost, the losing time, the rise back to the buy point). Since “time is money”, that’s a big deal…

    That means you wait for the drop time, for the crash, and then buy after “they all went down”, but are buying the one most likely to go back up…

  4. Tim Clark says:

    {jim2 says: 14 February 2013 at 1:07 pm
    While the countries do have signficant differences, if a stock market crash occurs, they will all fall.}

    What the H won’t?????

    Are you 100% in deflation assets (implosion) or inflation assets? You gotta make that analysis.

    Are you going to play the currency game, stay in cash and pick the Country whose currency rises against the Greenback when the SHTF?
    Or keep your $$$ in a TIP?
    Or invest in blue chips to reduce the pain? What allocations: oil, minerals, Proctor & Gamble?
    Or gold? I think E.M. is suggesting…..wait for it…….diversification!

    Disclaimer: At the time of this writing, the author has money invested in some (or all) of these recommendations.

    Thanks E.M. for the foreign stocks analysis.

  5. DirkH says:

    E.M.Smith says:
    14 February 2013 at 6:12 pm
    “Or even more important, as some countries have elections to admire “The Socialism Shiny Thing”, they crash while their more sober neighbors rise. (“Watch this space” as Italy has an election “real soon”…) ”

    Berlusconi is a right winger. Relatively speaking; structures in Italy are a high inflexibility of the labor market and strong and radical unions and anarchists (read, far-out leftists; not anarchists as in anarchy. Euro Black Bloc.). So he won’t be able to turn Italy into Singapore. Maybe just nudge it a tiny bit to the right.

    Monti is not a socialist either; he’s an installed, non-elected technocrat whose job it is to implement austerity (not real austerity – tax hikes yes, spending cuts no – Brussels austerity in other words. As Brussels itself is a huge bureaucracy they naturally tend to see all of Europe as subject to the whims of a huge hierarchical bureaucracy and there are no attempts at reducing regulations or implementing small governments.).

    To confuse matters further, Italy is strongly catholic. Which never stopped them from having a lot of leftism. But Berlusconi is not the Trudeau of Italy.

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