Chile stocks red-carded during the Cup

IF YOU are planning to trade Chilean stocks during the World Cup, forget it.

Although the team has a one in 50 chance of winning the month-long tournament, investors on the Santiago exchange are best in the world at ducking away to watch the games.

Transactions fell more than 99% when the national team was playing in 2010, according to a European Central Bank (ECB) study.

It was the biggest drop among 15 countries surveyed, which included nine in Europe, four in Latin America, the US and host South Africa. The median decline was 55%.

“The last time Chile played, the market was dead,” said Arturo Curtze, an equity analyst at broker and asset manager Vantrust Capital in Santiago.

“Everyone was watching. Managers allow their workers to bring TVs. In schools and universities everyone has TVs, and all the trading desks have them. Chileans always get overexcited about our team.”

With days to go before the start of the world’s biggest and most-watched sporting event, traders from Argentina to Japan are preparing themselves for a drop in business.

Transactions in even developed countries such as the US thinned out during the 2010 games in South Africa, according to the ECB’s 2012 study.

When Argentina’s national team was playing, trading tumbled 80% in Buenos Aires. Brazil’s team spurred a 75% drop in local volumes, while US games reduced trading 43%. In European countries, volume dropped 38% on average. — Bloomberg