Bice Inversiones is aiming for an increase of almost 14% for Ipsa

Bice Inversiones has set a target of nearly 14% rise for the Chilean stock index, the Ipsa, projecting it could surpass 12,500 points. This forecast was presented during a webinar titled “Desafío de los mercados en medio de un año cambiante,” where Aldo Morales, head of equity research at Bice Inversiones, outlined positive implications of the country’s major reforms on the market. Morales highlighted the tax reform as a key factor, noting the reduction of corporate tax rates from 27% to 23%. He explained that this change would have an immediate impact on earnings, even though its application will be gradual. According to calculations made by his team, lowering the corporate tax rate by four percentage points could add approximately 5% to the projected 28% increase in annual earnings. The firm’s initial target for the Ipsa was 11,749 points, representing a 10% gain in company profits. However, after adjusting expectations, they now anticipate the index to range between 12,500 and 12,700 points. The analyst emphasized that the current valuation levels of the Ipsa are attractive, driven by a healthy growth in corporate earnings and historically low valuations. As part of their investment strategy, Bice Inversiones recommends holding Chilean equities, particularly favoring sectors with proven growth histories such as ILC, banks, Falabella, and commercial centers. Mariela Bastías, head of strategy at Bice Inversiones, suggested including Latin American equity markets in diversified portfolios for the second half of the year. She argued that these markets benefit indirectly from developments in chip technology, lithium, data centers, and copper. Additionally, she pointed out that Latin American markets remain undervalued compared to international benchmarks, making them an appealing addition to investment strategies. Bastías further noted that the Chilean stock market still operates at relatively low levels compared to its historical performance and international peers. This makes it a compelling asset for investors seeking diversification within their portfolios. Marco Gallardo, head of fixed income at Bice Inversiones, commented on the evolving landscape influenced by geopolitical tensions and inflationary pressures. He stated that confidence in exposure to UF-denominated securities, initially fueled by concerns over Iran and rising inflation, has largely subsided. Gallardo concluded that maintaining a balanced portfolio involving both UF and peso assets is currently more appropriate. The firm's outlook reflects broader economic optimism, grounded in structural reforms and strategic shifts in investment priorities. Investors are advised to maintain a long-term perspective, focusing on sectors poised for growth and markets offering value opportunities. As the market continues to evolve, Bice Inversiones remains committed to providing insights based on thorough analysis and updated economic conditions.