Equity Research
June 12th, 2019 Monthly Andean Strategy Update Maintaining our Overweight position on Chile
In May, the Andean region posted a weaker performance in USD terms CREDICORP CAPITAL RESEARCH when compared to other Latam markets (Chile -8.5%, Peru -6.3% and • Colombia -9.5% vs Latam -2.4%). We are maintaining our Overweight position on Chile on the back of a Daniel Velandia, CFA more favorable balance of risks relative to Colombia and Peru, but +(571) 3394400 ext. 1505 earnings and macro dynamics continue to be weak. [email protected] • Although we recently revised our 2019E GDP growth for Chile from 3.3% to 3.0%, we still expect it to grow above potential in 2H19. Carolina Ratto • The market has suffered from some overhang due to two large +(562) 2446 1768 upcoming capital market events: Enel Am’s capital raise and [email protected] Cencosud’s real estate IPO. However, these events will take place soon. Tomás Sanhueza • Although the short term looks soft, we see higher downside risk in Peru +(562) 2446 1751 and profit-taking in Colombia, which sets a more enabling context for [email protected] maintaining our Overweight recommendation for Chile. In particular, we expect a stronger 2H19 for Chile in earnings and macro figures. Sebastián Gallego, CFA • Valuations are still discounted, even when stressing the earnings +(571) 3394400 ext. 1594 growth of relevant sectors such as Pulp, Retail and Banks. [email protected] We are maintaining our Neutral position on Colombia; we are re- introducing top banks among our top picks. Daniel Córdova +(511) 416 3333 Ext. 33052 • After the recent downgrade to Neutral (prior month), the local index [email protected] declined 9.5% in May (USD terms), compared to a 2.4% drop of the MSCI Latam. • We are maintaining our neutral to positive view on the macro front and our 3.3% GDP growth forecast for 2019E. That said, we acknowledge that the data from 1Q19 and unemployment figures have disappointed. • From a bottom-up perspective, given the recent correction of the local market, forward multiples are, once again, looking attractive. • We are re-introducing key players of the banking system as part of our top picks. Operating/financial trends should remain constructive towards 2020, and we continue to expect ROAE expansion. • We are maintaining our bets on other key sectors such as cement & construction and private consumption. • Accordingly, our Top Picks are Davivienda, Bancolombia, Cementos Argos and Nutresa. We are maintaining our Underweight recommendation for Peru, mainly on persistent uncertainty about metal prices. • Trade tensions between the US and China seem to be extending to security and strategic issues, further complicating the outlook for metal prices. • Public investment contracted more than anticipated in May, reverting the positive prints of March and April. • Private consumption remains relatively strong, providing support to names linked to domestic demand. • June and July could be months with less political noise, depending on IMPORTANT NOTICE (US FINRA RULE 2242) This document is intended for INSTITUTIONAL INVESTORS and is not subject to all of the independence and the pace of the progress of the Executive’s political reform bills through disclosure standards applicable to debt research reports prepared for retail investors. Credicorp Capital may do or seek to do business with companies Congress. covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. • Based on solid company fundamentals and favorable industry Investors should consider this report as only a single factor in making their dynamics, we are maintaining Ferreycorp and InRetail as our Top Picks. investment decision. Refer to important disclosures on page 22 to 25, Analyst Certification on Page 22. Additional disclosures on page 25. 1 Actualizar Contents
Monthly Andean Strategy Update
Chile: Earnings continue to be weak, but downside risk seems limited 5 Top Picks 7 Colombia: Our decision to downgrade Colombia came at a good time; we maintain our neutral position 9 Top Picks 12 Peru: Economic activity decelerates more than expected and global risks endure, although lower political noise could 13 act as a buffer Top Picks 15
Valuation Summary 17
Economic Forecasts 21
2 Actualizar LTM Andean Equities Performance (in USD)
IPSA COLCAP SP BVL General Index MSCI Latam 130
120
110
100
90
80
70 Jun-18 Aug-18 Oct-18 Dec-18 Feb-19 Apr-19 Jun-19
Source: Credicorp Capital, & Bloomberg
Andean Equities Fwd P/E (12 month rolling) vs 5Y historical average
P/E FWD vs Historical 5Y Average
20.0x 30.0% 18.0x 16.0x 16.0x 14.6x 20.0% 13.1x 14.0x 10.0% 12.0x 10.0x 0.0% 8.0x 6.0x -10.0% -17% 4.0x -18% -18% -20.0% 2.0x .0x -30.0% Chile Peru* Colombia *Peru: vs 2Y historical average Andean Equities Fwd EV/EBITDA (12 month rolling) vs 5Y historical average
EV/EBITDA FWD vs Historical 5Y Average
9.0x 9.0x 30.0% 7.8x 8.0x 25.0% 6.8x 7.0x 20.0% 6.0x 15.0% 10.0% 5.0x 5.0% 4.0x 1% 0.0% 3.0x -5.0% 2.0x -10.0% 1.0x -16% -17% -15.0% .0x -20.0% Chile Peru Colombia Source: Credicorp Capital, & Bloomberg
3 Strategy Summary within Andean Context Long view Short view (12-to-18 months) (1-to -3 months) Chile Allocation: Overweight (+) Safe haven on the regional landscape compared to riskier markets The Enel Americas capital increase and (+) Discounted valuations when compared to its history Cencosud's real estate IPO has generated an (-) Downside risk to GDP growth overhang that will limit flows in the short-term. Both (-) Upcoming two months will be probably soft due to capital market events events should take place in June. Once that (-) Negative impact of global risks happens, it all comes down to earnings growth that (-) No clear catalyst with lacking earning growth in short term we believe should ramp up in 2H19. The latter (-) Exposure to risks coming from Argentina and Brazil coupled with valuations that are still discounted reduces potential downside risk in the market. Strategy: We continue to favor a stock picking strategy of companies with solid fundamentals, earnings momentum and clear catalysts. Top picks: ILC, Engie Chile and Sigdo Koppers Colombia Allocation: Neutral (+) Better operating/financial trends at the banking sector. The most important issues in the short term are: (+) Recovery of the consumption and cement/construction sectors. global tensions, oil prices, exchange rate (+) Inflows coming from local pension funds. performance, corporate governance issues/news, (-) Volatility across foreign markets. rebalancing process (FTSE at the end of May), and (-) Twin deficits. 2Q19 results. (-) A potential law that seeks to eliminate credit/debit card fees.
Strategy: We have decided to stay Neutral in Colombia. We see higher risk aversion around the globe, which is not particularly positive for Colombia even when considering a relative context. From a bottom-up perspective, we re-introduce Bancolombia and Davivienda in our top picks given the positive perspective on the sector. Finally, we continue to bet on private consumption and cement sectors. Top picks: Davivienda, Bancolombia, Cementos Argos, and Nutresa. Peru Allocation: Underweight (+) Private consumption remains fairly resilient, in contrast with both public and InRetail would benefit from positive market private investment. expectations on value to be unlocked from vertical (+) After Congress' vote of confidence, political noise is lower. integration. For Unacem, our new TP suggests (-) Expectations of a resolution in US-China trade dispute have deteriorated further, attractive upside. Luz del Sur should also benefit with additional pressures on metal prices. from sound results and expectations on upside from (-) Private investment is taking longer than expected to regain its footing; public the potential sale of Sempra’s stake. Engie is investment fell strongly in May. another defensive stock with probable rebound. (-) Valuations of non-mining companies remain at their historical averages. Finally, Alicorp remains within our defensive strategy leveraged on the consumer segment.
Strategy: Trading ideas: As commodity price short-term risks are persistently high, we favor stocks such as InRetail, Unacem, Luz del Sur, Engie and Alicorp. Ferreycorp, linked to the upcycle of mining investment. At the same time, strong private consumption and company fundamentals support InRetail. Top Picks: InRetail and Ferreycorp.
4 Chile Earnings continue to be weak, but downside risk seems limited
Two significant In May, the Chilean market posted a negative return in both USD (-8.5%) and CLP (- upcoming capital 4.0%), in line with Peru (-6.3% in USD), Colombia (-9.5% in USD) and other international market events have markets (S&P500 -6.6%, MSCI Europe -6.2%, MSCI Asia -9.1% and MSCI EM -7.5%). generated a strong The local market continued to post the same dynamics seen in the previous months, and overhang in the the outperformance seen in January 2019 has already been erased. Therefore, YTD the market. local market has yielded a -4.7% return in USD and a -2.5% return in CLP. Accumulated flows for the year are still below what we saw in the same month last year (-12.8% y/y). Foreign investors have been more active recently as they have been anticipating the upcoming rebalancing; however, we expect low activity from them in the upcoming months given the summer holiday season in the northern hemisphere. Local investors continue to show low activity levels, which, in our view, can be ascribed to the two significant capital market events that should start taking place in June 2019: (i) the USD 3.0bn capital increase of Enel Americas and (ii) the IPO of the real estate division of Cencosud, which is expected to amount to USD 1.0bn. We expect to see a recovery in trading volumes once these events take place.
The Central Bank of Chile cut the monetary policy rate by 50 bps to 2.50%, a decision that was unanimously adopted by the Board. We see this as a higher impulse amid lower growth momentum. In fact, the BCCh announced that the new baseline scenario for economic growth assumes a 3.1% (2.75% - 3.50%) expansion for this year, 40 bps less than what was expected three months ago; this includes the updated monetary impulse. Both 2020 and 2021 forecasts were set at 3.5% - or the economy’s trend/potential growth rate. It seems that the BCCh is adopting a wait-and- see approach. Indeed, the entity said that policy normalization seems likely going forward. However, to raise the policy rate: i) inflation needs to get closer to the 3% target, ii) the labor market needs to adequately absorb the migratory flow, iii) investment needs to recover after a feeble 1Q19 and iv) the external scenario needs to improve. Given that all conditions require time to be met, we think that the policy rate will remain at 2.50% throughout the remainder of the year but cannot rule out further cuts if the economy does not gain dynamism in 2H19.
Is this positive for the IPSA index? We think it is; however, we do not expect a significant reaction from the stock market going forward. We see the monetary rate cut as an acknowledgement from the Central Bank that its previous view was mistaken, that economic activity is still weak and that it overestimated a recovery. However, we believe We do not expect a that the stock market was already pricing in weaker-than-expected activity and that the significant reaction outflows seen in previous months were a reflection of that. In other words, we believe the from the market to outflows were due to a thesis from the Central Bank that was not materializing. We the recent monetary believe the Central Bank is just aligning itself with the market, and, therefore, we rate cut. Weaker do not expect a significant reaction from the Chilean stock market going forward. activity was already priced in. We are maintaining our Overweight relative position in the Andean region on the back of a more favorable balance of risks when compared to Colombia and Peru. Colombia has been a strong outperformer this year (+8.0% in USD terms and +12.1% in COP terms), so valuations are looking stretched and upside seems limited. In the case of Peru, it looks like a relevant event related to the classification of BAP shares in an important index could generate an overhang in the upcoming months due to the relevance of these shares in terms of weight.
5 Chile is still looking discounted compared to its history, even when adjusting earnings for relevant sectors such as Retail, Banks and Forestry. Although short-term momentum seems weak and we do not expect earnings growth to pick up until 2H19, we believe Downside risks seem downside risks are much more limited than they are in the other Andean markets, and the more limited when two significant capital market events in June should reduce the market overhang seen in compared to other recent months. Still, we believe our relative play should take a couple of months to Andean markets. pay off, considering the weak momentum of the Chilean market.
The 1Q19 earnings season is over, and corporate earnings showed a slow start to 2019. Overall, results were in line with our estimates. Top line, EBITDA and EPS increased 6.5%, 3.1% and 1.5% y/y in CLP terms, respectively; however, as CLP depreciated by over 10% y/y, they decreased 5.4%, 8.4% and 9.8% y/y in USD terms, respectively. Looking at operating results, the bulk of EBITDA growth came from i) Cencosud, explained by the sale of a 49% stake of the bank in Peru, ii) Engie Chile, which benefited from new contracts, iii) SK and Besalco, due to a low comparative base and efficiency gains and iv) the Telecom sector. On the other hand, the main EBITDA drops came from i) CAP, due to the accident at its main port Guacolda II, which negatively impacted cash cost, ii) the forestry sector, in which results were dragged down by lower pulp prices and unfavorable FX, iii) the retail sector, in part explained by a challenging macro scenario, weak consumption in Chile, high promotional activity and unfavorable FX and iv) SQM, mainly due to lower lithium prices and higher royalties in the Sala de Atacama operations. The main positive surprises came from i) Cencosud, explained by stronger-than-expected results from Brazil and Argentina and ii) Enel Chile, due to higher- than-expected sales from the non-regulated segment. On the other hand, the main negative surprises came from i) commodity-related companies such as Copec, CAP and SQM, ii) Forus and iii) Engie Chile. We highlight positive earnings momentum for SK, SMU, Ripley and Entel and negative earnings momentum for CAP, Falabella, Forus, Cencosud, SQM, CMPC and Copec..
Although we could see some further downward revisions in earnings for 2019, Valuations in Chile valuations continue to be discounted against the historical average. In our view, are still discounted, some relevant sectors such as Retail, Banks and Forestry could have some downward even when adjusting revisions in earnings for 2019; however, even if we cut our EBITDA and EPS estimates for 2019 EPS growth. those sectors, we still believe the Chilean market is trading close to one standard deviation below the historical average. Therefore, it seems that downside risk to the market is limited, and catalysts should come further down the road ahead with a recovery in earnings growth and the reduction of the overhang related to capital market events. For 2019, we believe it is fair to expect an EPS growth of ~5% y/y. P/E Forward (12-month rolling) FV/EBITDA Forward (12-month rolling)
26 12
24 11 22
20 10
18 9 16 8 14 14.6x 7.8x 12 7 Jun/13 Jun/15 Jun/17 Jun/19 Jun/13 Jun/15 Jun/17 Jun/19 Source: Company Reports, Credicorp Capital, & Bloomberg
6 Chile Strategy
Our Top Picks Our Chilean equity sample is trading at 14.6x P/E 12m Fwd and 7.8x EV/EBITDA 12m continue to be Fwd; both continue to be significantly discounted against the market’s three-year average. ILC, Engie Chile As mentioned above, when adjusting earnings estimates, there is still a significant and SK. discount, which softens the potential downside for the local market.
We have not seen any change in trend regarding the dynamics of the local market, which should continue as is until there are some signs of recovery in earnings and the market overhang ends. We continue to have a cautious and selective approach for the Chilean market. This month we are maintaining our Top Picks. Top Picks Chile
ILC (BUY; TP: CLP 14,200). We recently updated our coverage of ILC shares, maintaining our Buy rating and adjusting our TP from CLP 12,900 to CLP 14,200 (+10%), which implies a ~30% return including dividends. ILC shares decouple from the rest of the Chilean market as they are one of the few stories that offer an attractive ordinary EPS growth outlook for 2019 and beyond. In addition, valuations suggest that shares are trading cheap, and, since regulatory risk has significantly decreased, we believe downside risk is limited. This, together with a high dividend yield (over 4%), supports our thesis that ILC shares are high-quality assets that work perfectly as a long-term investment opportunity.
Engie Chile (BUY; TP: CLP 1,450). We are maintaining Engie Chile in our Top Picks. Its defensive profile, excellent long-term PPA portfolio and attractive dividend yield support our recommendation. The EBITDA 2019 guidance of USD 470mn implies a ~30% increase in results, on the back of the expansion of 375MW in the IEM project and sales of the new SIC contract.
7 Sigdo Koppers (BUY; TP: CLP 1,373). We are maintaining SK in our Top Picks due to its positive earnings momentum and the high possibility of its capturing the increase in mining construction/production activity through its subsidiaries. For 2019, we foresee a significant bottom line increase (+39.2% y/y) and improved margins (EBITDA mg. 2018: 13.4%; EBITDA mg. 2019E: 15.2%) driven by i) the recovery of the company’s engineering & construction subsidiary (ICSK) due to the end of an overbudget project in Peru and higher backlog execution, ii) operational improvements in Magotteaux (EBITDA mg. 2018: 8.7%; EBITDA mg. 2019E: 10%), such as increased synergies with its consortiums in China, the implementation of new technologies in its factories, the selling of higher quality products and the transfer of production from Belgium to Thailand and iii) the fact that the positive trend in its machinery subsidiary SKC should continue during upcoming years. In addition, estimated mining investment remains high, reaching USD 18,661mn for the 2018-2022 period, leading to a significant upside risk to our estimates in the event of new project announcements.
Chile - Top Picks
Chilean Picks Last Target Total Mkt. P/E FV/EBITDA P/BV Div Yield Price Price Upside Return (USD mn) 2018E 2019E 2018E 2019E LTM 2019E Sectors ILC 11,682 14,200 21.6% 25.9% 1,687 11.3 9.7 nm nm 1.7 4.4% Conglomerates Engie Chile 1,236.2 1,450.0 17.3% 21.4% 1,881 10.8 10.2 5.8 5.5 0.9 4.1% Utilities SK 1,252.0 1,372.6 9.6% 13.1% 1,944 16.2 13.2 8.3 7.2 1.5 3.5% Industrial Chilean Picks a 16.2% 20.1% 5,512 12.8 11.0 7.1 6.4 1.4 4.0% IPSA 4,951 6,150 24% 28% 150,095 14.2 12.8 8.1 7.4 1.6 4.1% a Simple average, excluding Market Capitalization
Sources: Bloomberg, Company Reports and Credicorp Capital a Simple average, excluding Market Capitalization b Prices in local currencies
8 Colombia Our decision to downgrade Colombia came at a good time; we are maintaining our Neutral position
Market Color
In May, the COLCAP index underperformed the MSCI Latam. In fact, the local index declined 9.5% (USD terms), compared to a 2.4% decline for the MSCI Latam. We believe that the lower return in Colombia was primarily explained by: i) the increase in global tensions, leading to higher risk aversion; in fact, the VIX index climbed 42.6% during the month, ii) the weak performance of Brent oil prices (-11.4% in the month) and iii) weak macro data as 1Q19 GDP came in below our expectations and below the 3.0% threshold. From a bottom-up perspective, in addition to the effect of oil prices on Ecopetrol, we highlight that the potential law that seeks to eliminate some banking fees has created noise in the local market (we see it as a good entry point for key banks).
Companies with very specific drivers/situations stayed resilient during May, but Only CNE and most companies had a weak month (-9.5% for the local index). Canacol Energy and AVH had positive Avianca were the only names in the COLCAP index with positive returns in May (2.2% returns during and 1.6%, respectively). In addition, we highlight that ISA only fell 1.9%. Canacol Energy May. should be decoupled from the macro/global news due to the entrance of an additional 80 mmscfpd of gas capacity in June, which should allow the company to increase gas sales up to 215 mmscfpd. The case of Avianca is unique given the recent announcement of a new BoD; we reiterate that Avianca has been a clear underperformer in recent years. Finally, the current sales process of ISA by EPM and the rumor of a potential sale of the government’s stake in ISA has created appetite among investors. Recall that the deadline for the first stage of the EPM program closed on May 31st, 2019. Preferred shares of Sura and Cementos Argos were the top losers during the month (-16.7% and -13.5%, respectively).
Regarding market players and flows, local pension funds have by far the largest net buying position in 2019; meanwhile, ETF flows to equities in Colombia have stayed resilient compared to regional peers (Chile / Peru). As of Apr-19, local pension funds were the largest net buyer with USD 223.7 mn; these agents were followed by local brokerage firms with a modest buying position of USD 27.7 mn. On the other hand, foreigner investors, local retail investors and corporate agents were all net sellers. This allocation is another factor that supports our Neutral position on Colombia. However, we highlight that equity-oriented ETF flows to Colombia have been stronger than the flows to peers in the region. In fact, flows to Colombia amounted to USD 206 mn as of June 7th, 2019, compared to -USD 98 mn for Chile and USD 21 mn for Peru.
Macro / political developments
Key macro data were released during May. GDP grew by 2.8% y/y in 1Q19 according to DANE. This figure was way below our forecast but close to the market consensus (3.5% y/y and 3.0% y/y, respectively). On the supply side, the main drag was construction (-5.6% y/y) amid a still depressed buildings subsector, while imports capped overall growth on the demand side due to a strong performance (+13.7% y/y). The seasonally- adjusted GDP series showed no advance whatsoever (0.0% q/q), the weakest result since 1Q17. Despite the disappointing 1Q19, we still expect economic activity to gradually improve going forward as both private and public investment should accelerate, mainly driven by: i) an increase in capital goods imports, ii) a lower tax burden for corporates and
9 iii) a boost from the political cycle prior to the regional elections in Oct-19. Thus, we are maintaining our 3.3% GDP growth forecast for now, while acknowledging downside risks.
Unemployment figures also showed additional signs of weakness. The national unemployment rate deteriorated for the ninth straight month in Apr-19 as it increased by 0.9 pp y/y to 10.3%. Meanwhile, the rate of the 13 main cities rose 0.5 pp y/y to 11.1%, its seventh consecutive deterioration. That said, we highlight that the figure at the city level was better than expected; our estimate and the market consensus estimate was 11.5%. A gradual acceleration of the economy should contribute to a stabilization of the labor market. That said, we acknowledge that the significant increase in the minimum wage for 2019 and potential pressures from the migration of Venezuelans are key risks to our thesis.
The current account deficit rose to 4.6%, which is the highest quarterly level since 2017; the good news came from capital goods imports and FDI. According to the local Central Bank, the current account deficit (CAD) amounted to USD 3.6 bn or 4.6% of GDP. This figure increased 1.2 pp from 1Q18 (+USD 808 mn). The weak CAD was mainly driven by a wider trade balance deficit amid broadly stable exports and stronger imports, particularly those related to capital goods. That said, we highlight that the capital account continued to finance the CAD by a wide margin; in fact, the capital account reached USD 5.5 bn, 1.5x the nominal current account deficit. This was mostly explained by FDI, which rose 68.4% y/y, with most flows going to the oil and mining industries (43.9%).
The neutral to negative macro data seem to support our recent decision to take partial profits in Colombia (after a strong 1Q19) while downgrading our recommendation to Neutral. However, we continue to believe that an acceleration of the economy in upcoming quarters along with specific drivers in key sectors may result in a resilient/positive performance of the local market when compared to the region. The main threat to our thesis is global tensions leading to volatility and risk aversion given: i) Colombia’s twin deficits, ii) the relevance of oil prices for Ecopetrol (13.9% of the COLCAP index) and iii) FX performance.
Equity strategy
Despite our Neutral position on a regional basis, our 2019E year-end target for the COLCAP index remains unchanged at 1,720 points (consistent with our still positive Our year-end view on local equities). Our equity strategy, from a top-down perspective, continues to COLCAP target rely upon higher economic activity in 2019 vs prior years. We reiterate that our GDP remains at 1,720 growth forecast of 3.3% is unchanged, even when considering the 1Q19 data. It is points. important to note that this would be the first time since 2014 that the Colombian economy grew above the 3.0% threshold. Other macro fundamentals support our neutral to positive view on local equities as: i) inflation should remain under control and within the Central Bank’s range of 2.0% - 4.0% (we expect year-end inflation to stand at 3.5%) and ii) the Central Bank’s rate is expected to remain at 4.25% for the vast majority of the year.
From a bottom-up perspective, considering forward trading multiples, the local market remains attractive. The Colombian equity market currently trades at 12-month forward P/E and EV/EBITDA of 14.6x and 7.6x, respectively, compared to an average of 19.5x and 8.9x, respectively, over the last three years. The recent correction has opened up an opportunity as the local market is trading at more than one standard deviation below the historical average.
Regarding asset selection, we are returning to our main strategy in recent quarters as we are re-introducing top banks in our core equity strategy. In addition, we are maintaining our bets on other key names such as Cementos Argos and Nutresa. At this point, we are re-introducing Davivienda and Bancolombia in our Top Picks. We have
10 recently updated our figures for both banks. Operating/financial trends should continue to maintain positive momentum across the banking industry, mainly driven by: i) acceleration of loan growth, for which we forecast a figure of 8.8% y/y in 2019, compared to 6.2% y/y in 2018, ii) a decrease of 10-30 bps in cost of risk during the 2019-2020 period relative to the levels observed in 2017-2018 and iii) the lack of capital concerns or requirements, in our view, even when considering the implementation of Basel III standards. It is important to note that density in risk-weighted assets may decline as new regulations require changes, particularly in the commercial and mortgage segments. The combination of ROAE expansion (at least 100 bps during the 2019-2020 period relative to 2018) and trading multiples below 1.5x P/BV 2019E are an ideal combo for investors. The main short-term threat to our thesis is the potential implementation of a law that seeks to eliminate some banking fees (mainly debit/credit card fees). However, we believe that the probability of the law being approved in its current form is only 20%-25%.
Davivienda continues to be our top choice in the banking segment. We believe that the bank has key advantages when compared to peers, such as i) slightly higher expected profitability when compared to Bancolombia, ii) no capital pressures ahead of Basel III implementation and an actual boost to capital ratios that may eliminate the potential need for capital issuance and iii) no major noise related to the Ruta del Sol 2 case, which we continue to observe in the case of Grupo Aval. We are aware of liquidity conditions and the preferences of institutional investors amid ETF/index exposure. This (in addition to better fundamentals in the banking sector) also supports our decision to include Bancolombia in our Top Picks.
We still expect a slow recovery in the Colombian cement and construction sector (in terms of prices and quantities) during 2019. Cement dispatches have posted a 0.9% LTM increase, while prices have increased 4.84% YTD, above our 4.00% estimate; this is the first simultaneous increase since 2015. Furthermore, the decline in housing inventory and the deceleration in the decrease of licenses are positive, in our view. Also, despite overall negative construction GDP growth in 1Q19, the civil works segment rose 8.5% y/y, the strongest result since 4Q17, amid positive dynamics from the 4G program and district projects related to the political cycle. Likewise, concrete production for civil works has increased 42.4% LTM. Cemargos is our top pick in the sector because it has ~70% market share of 4G projects and is the market leader in Colombia within the cement business.
Finally, private consumption fundamentals remain resilient, thus we are maintaining our bet on Nutresa as part of our Top Picks.
Our Top Picks are Davivienda, Bancolombia, Cementos Argos and Nutresa.
P/E Forward (12-month rolling) EV/EBITDA Forward (12-month rolling)
28 11 26 24 10 22 9 20 18 8 16 14 14.6x 7 7.6x 12 10 6 Jun-16 Jun-17 Jun-18 Jun-19 Jun-16 Jun-17 Jun-18 Jun-19 Source: Company Reports, Credicorp Capital, & Bloomberg
11 Top Picks Colombia
Davivienda (BUY; TP: COP 42,000). We are re-introducing Davivienda in our Top Picks. We recently released a new update on the bank, in which we reiterated our BUY rating (see report). Our positive view on the bank is mainly supported by: i) higher expected loan growth in Colombia compared to the industry average for the region (12.1% y/y vs 8.8% y/y for 2019E), ii) better trends in asset quality compared to prior years due to lower provision expenses in key corporate cases and an improvement in the retail segment, particularly in Colombia, iii) recent developments on the digital front related to new products that have a higher contribution to the total sales of the bank (27.0% of total sales currently come from digital channels vs 1.0% in 1Q18), iv) ROAE that is expected to improve by at least 100 bps from 2019E in 2020E and v) the fact that our TP has an implicit valuation of a conservative 1.5x P/BV 2019E and that shares look attractive when adjusting P/BV for value generation in 2020E.
Bancolombia (HOLD; TP: COP 43,000). In addition to similar trends in loan growth and lower provision expenses in Colombia, when compared to Davivienda, we believe that Bancolombia will post a better operating/financial performance mainly driven by: i) efforts on OPEX that should lead to a cost-to-income ratio of 48.6% in 2019E, compared to 50.1% in 2018 and ii) a focus on the consumer segment, in which we expect the bank to grow by more than 15.0% y/y, compared to ~12.0% y/y for the industry. Finally, we believe that relative valuation looks attractive when considering the adjusted P/BV for value generation towards 2020E.
Cemargos (BUY; TP: COP 9,900). Recall that, on March 1st, 2019, we updated our valuation model and view on Cementos Argos, including a BUY rating. At this point, our view on the company factors in the deceleration of the US market and our new estimates that consider the impact of the entry of new capacity into the Colombian market. Our BUY rating is based on i) an expected pick-up in the cement sector in Colombia, where Cemargos is the leader (we expect price increases during 1H19 and after 2021), ii) stability in the US market with EBITDA margin expansions and iii) Cemargos’ current 10.1x 2019E EV/EBITDA, which implies a ~30.3% discount vs its historical average.
Nutresa (BUY; TP: COP 31,900). We continue to be optimistic about the company’s performance in the mid term. 1Q19 results left us with a more positive view on growth, which, in our view, will be the main driver for shares. Our thesis on Nutresa is based on: (i) the volume growth trend, which has already shown a recovery, leveraging on the company’s leading position in its core categories under a more favorable scenario for consumption in Colombia, (ii) increases in prices due to innovation, sales mix and specific price increases, (iii) a favorable scenario for commodities and (iv) the turnaround story in the underperforming segments of recent years: TMLUC and El Corral.
Colombia - Top Picks Colombian Picks Last Target Total Mkt. P/E FV/EBITDA P/BV Div Yield Price Price Upside Return (USD mn) 2018E 2019E 2018E 2019E LTM 2019E Sector Davivienda 39,400 41,500 5% 8% 5,441 10.3 8.9 nm nm 1.7 2.3% Banks Bancolombia 39,760 36,900 -7% -4% 11,419 12.8 10.8 nm nm 1.7 2.8% Banks Nutresa 25,900 31,900 23% 25% 3,644 17.5 15.3 8.6 7.8 1.4 2.2% Food & Beverages Cemargos 7,350 9,900 35% 38% 2,968 42.8 41.9 10.3 10.2 1.3 3.4% Cement & Construction Colombian Picks a 14% 16.7% 23,471 20.8 19.2 9.4 9.0 1.5 2.7% COLCAP 1,510 1,720 14% 19% 97,196 15.1 13.2 7.3 6.7 1.0 4.9%
Sources: Bloomberg, Company Reports and Credicorp Capital a Simple average, excluding Market Capitalization
12 Peru Economic activity has decelerated more than expected, and global risks continue, but lower political noise could act as a buffer
The economy has been somewhat less dynamic than expected so far this year. Due On top of subdued to a statistical effect, market consensus had anticipated a deceleration of growth in activity in primary primary sectors, mainly fishing and mining, during 1Q19. The deceleration materialized, sectors, private and we also observed a softening of some domestic demand indicators during the first investment has quarter of the year, such as cement consumption and electricity production. This remained soft YTD, deceleration persisted in April, as evidenced by electricity output (+3.2% y/y, the slowest with private pace since September of last year). In addition, after public investment decreased by less consumption still than forecasted in 1Q19 and rose by 15.5% y/y in March and 20.7% y/y in April, this resilient. positive trend ended in May as public investment contracted (-30.6% y/y), casting some doubt on its contribution to economic growth during 2Q19.
While private consumption remains resilient, both public and private investment are still a drag on overall GDP performance. Private consumption expanded 3.4% y/y in 1Q19, mostly in line with previous quarters, supporting the attractiveness of retail and consumer goods names like InRetail and Alicorp. However, gross private investment only grew 2.9% y/y, and public investment fell 10.9% y/y. Overall, the economy expanded 2.3% y/y in 1Q19 (+1.7% y/y for domestic demand), below our estimate (~2.5% y/y). GDP would have to grow at over 2.5% in 2Q19 and then increase 5.0% y/y in 2H19 for the economy to expand 3.7% in 2019 (our forecast).
The external front has continued to deteriorate, increasing the downside risk to The external front Peru GDP forecasts and local equity market performance. With the US and China still remains a drag on far away from each other on a range of issues, the next key date to watch is June 28-29, the local economy when President Trump and President Xi will meet at the G20 Summit in Osaka, Japan. and mining stocks; Rhetoric and actions from both sides hardened last month, prompting sizable retreats in we do not foresee copper and zinc prices (-9.1% and -10.7% in May, respectively). We believe the current significant changes dynamics will persist in June, though we do not rule out the possibility that some positive in June. expectations could build up in the days leading up to the G20 Summit.
LTM inflation rose again in May, as expected; it should decelerate next month. CPI rose 0.15% m/m in May, in line with market estimates but above May of last year (+0.02%), which increased LTM inflation to 2.73%. However, it should retreat in June and July due to a statistical effect in 2018. Therefore, as inflation expectations remain anchored within the target range, we do not expect the Central Bank to change its policy rate (now at 2.75%) in the meeting on June 13th. Given that inflationary pressures stemming from domestic demand growth are still not significant, we believe the monetary stimulus will remain in place in the coming months.
Political noise could Congress gave a vote of confidence to the executive branch’s political reform diminish in the very package; political noise should diminish. Congress has agreed to debate and approve short term; market the executive branch’s legislative proposals i) maintaining the core elements required by attention should the executive branch and ii) before the end of the current legislative period (formally focus on progress on finishes on June 15th but can be extended into July). We can reasonably expect that, with the political reform this episode now in the past, political noise will decrease and room for collaboration package. between the executive branch and Congress on other issues will open up.
13 Peru Strategy
As expected, in May, the Lima Stock Exchange (BVL) continued April’s downward trend, falling 6.28% m/m in USD and 4.66% m/m in PEN. The drop was felt across the board, with all sectors recording a negative performance, mainly as a result of heightened uncertainty about the impact of global trade disputes on emerging markets. Also, selling pressures increased as i) FTSE announced it will reclassify Credicorp’s stock (BAP) as USA national, effective after the close of trading on June 21st and ii) MSCI decided in mid- May to exclude Volcan B from its Global Small Cap Indexes, which became effective after the close of trading on May 28th.
We are maintaining our Underweight recommendation for Peru as the external front We are maintaining seems to have deteriorated further. In addition to trade, other security and strategic our Underweight issues have arisen between the US and China, making it unlikely that there will be a recommendation for resolution of the trade negotiations in the very short term. The possibility of the US Peru as the external imposing tariffs on the rest of its imports from China will be a drag on base metal prices at front remains least until the June 28-29 G20 Summit, in our view. Therefore, we have a defensive challenging. stance on local equities for the short term and reaffirm our preference for stocks linked to domestic demand to hedge commodity risk.
We are positive on the local private consumer industry in the short and medium term. Thus, InRetail continues to be one of our Top Picks, even though the stock has been rallying since the beginning of the year. Additionally, we favor utilities to escape the volatility of mining companies and, generally, to avoid high beta sectors for now. Regarding cement and construction, we believe Unacem will start to reflect the value of the elimination of management fees, while Pacasmayo stock looks weak due to the delay in reconstructions. On the other hand, Ferreycorp’s 2019 results should continue to be boosted by its strong positioning in terms of mining investment, and we believe the price is not currently reflecting this. We still prefer domestic demand Trading at strong discount against historical averages. At 13.1x 12M forward P/E, stocks amid companies under our coverage are trading at a ~17.5% discount against the two-year commodity price historical average (corrected for the significant losses in Buenaventura). Likewise, the uncertainty in the 12M forward EV/EBITDA of 6.8x represents a 16.5% discount vs the five-year historical short term. average. For both multiples, the discount is at approximately one standard deviation from the historical averages.
If mining companies are excluded, the discounts almost disappear. Depressed metal prices continue to impact the mining industry, somewhat harder than a month ago, while stocks linked to domestic demand continue to trade at historic average levels.
P/E Forward (12 month rolling) * FV/EBITDA Forward (12 month rolling) * 22 11
20 10
18 9
16 8 6.8x 13.1x 14 7
12 6 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19
Source: Company Reports, Credicorp Capital, & Bloomberg *Mean in the chart considers the last 2 years.
14 Top Picks Peru
InRetail (BUY; TP: USD 43.80). We maintain our strong conviction on the name based on We continue to see the guidance of ~30% growth in EBITDA for Pharma and ~15% growth in EBITDA for an opportunity in Food. Growth opportunities in Food are coming from the new formats Economax (cash & InRetail as synergies carry) and Mass (hard discounter), which reached ~7% and ~3%, respectively, of total with Quicorp could food sales in 1Q19. Also, we believe that Inkafarma Express will allow InRetail to continue unlock more value to gain market share in the traditional channel and that there is room to improve margins than meets the eye. due to synergies from vertical integration and store maturation. All in, we believe that InRetail has a strong positioning in the Peruvian market and should be able to continue to expand it.
Ferreycorp (BUY; TP: PEN 3.00). Ferreycorp revenues increased significantly in 1Q19 on the back of a growing spare parts & services (SP&S) business line, deliveries of equipment for mining units for contracts signed in 2018 and sales to the construction sector. Gross margin increased more than expected due to the higher participation of the We expect mining SP&S segment in the sales mix, which reached record levels. The gross margin investment to post improvement, coupled with higher-than-expected depreciation and amortization, led to a expansions of 23% in 2.9 pp increase in the EBITDA margin. Net income was further boosted by non-cash 2019 and 18% in exchange rate (FX) gains as the PEN and CLP appreciated against the USD. 2020. . We believe Ferreycorp has attractive medium-term fundamentals. It will provide a fleet of CAT trucks of 320 MT and other types of equipment for the Quellaveco mining project; also, for a five-year period, it will provide specialized support to this Anglo American project (total value of the contract is USD 500mn, above our expectations). In addition, Ferreycorp has a USD 100mn contract with the Mina Justa project of Minsur to deliver CAT machines in 2019 and 2020. As such, Ferreycorp has locked in strong growth rates in sales of new machinery until at least 2021. Additionally, the sales of spare parts and services should continue to grow, albeit at a more moderate rate, providing more stability to the company’s overall revenues. These positive factors will drive 2019 results, and we believe this positive impact is not yet priced in at current price levels. All in all, Ferreycorp is positioned to be one of the top performers in this mining investment upcycle. .
Peru - Top Picks
Peruvian Picks Last Target Total Mkt. P/E FV/EBITDA P/BV Div Yield Price Price Upside Return (USD mn) 2018E 2019E 2018E 2019E LTM 2019E Sectors InRetail 37.00 43.80 18% 19.3% 3,804 26.9 18.3 13.1 11.9 3.1 0.9% Retail Ferreycorp 2.20 3.00 36% 43.0% 643 7.3 7.6 6.4 6.2 1.0 6.7% Materials Peruvian Picks a 27% 31.2% 4,447 17.1 13.0 9.7 9.0 2.0 3.8% S&P/BVL 20,299 23,400 15% 18% 34,562 14.4 12.5 7.4 6.8 1.9 2.7% a Simple average, excluding Market Capitalization, IFS share price in USD Source: Company Reports, Bloomberg and Credicorp Capital
15 Valuation Summary
June 2019
16 Chile
ADTV P/E FV/EBITDA P/BV Div Yield. ROAE ROAA Company Sector Px Last Px Target Rating Mkt. Cap Local ADR 2019E 2020E 2019E 2020E LTM 2019E 2020E 2019E 2020E 2019E 2020E AESGener Utilities 179 190 HOLD 2,173 1.8 7.9 8.3 6.4 6.1 0.8 13.2% 12.7% 10.5% 10.0% 3.4% 3.2% Aguas-A Utilities 396 390 UPERF 3,389 2.7 17.8 16.8 10.2 9.7 3.8 5.8% 6.1% 22.4% 23.3% 7.5% 7.7% Andina-B Food & Beverages 2,400 2,880 HOLD 3,053 4.5 0.4 17.5 15.4 8.2 7.7 2.7 4.3% 4.8% 15.4% 16.6% 6.0% 6.6% AntarChile Conglomerates 8,160 13,900 BUY 5,379 1.1 8.5 7.7 5.6 5.7 0.8 4.9% 4.7% 8.8% 9.1% 2.5% 2.6% Banco de Chile Banks 98 98 UPERF 14,332 7.4 2.3 15.5 14.4 nm nm 3.1 3.4% 3.6% 18.7% 19.1% 1.7% 1.7% Banco Santander Banks 50 56 HOLD 13,597 8.3 9.8 14.1 12.8 nm nm 3.1 4.2% 4.6% 20.0% 20.4% 1.6% 1.6% BCI Banks 45,311 49,100 HOLD 8,894 3.8 13.9 11.6 nm nm 1.8 2.2% 2.5% 12.3% 13.7% 1.0% 1.1% Besalco Construction 608 745 BUY 506 0.4 21.7 19.1 8.9 7.9 1.9 2.5% 2.9% 8.2% 8.9% 2.2% 2.4% CCU Food & Beverages 9,350 9,530 HOLD 4,990 3.8 5.7 20.8 18.7 9.9 9.2 3.3 5.3% 2.9% 12.6% 13.7% 7.2% 7.8% CMPC Pulp & Paper 1,809 3,100 BUY 6,533 6.1 10.0 9.9 5.1 5.0 0.8 4.8% 4.5% 7.5% 7.2% 4.1% 3.9% Colbun Utilities 133.2 160.0 BUY 3,374 2.2 12.2 12.3 6.3 6.6 0.9 12.4% 6.6% 7.7% 7.8% 4.2% 4.2% Concha y Toro Food & Beverages 1,399 1,520 HOLD 1,510 1.5 16.1 16.0 11.6 10.7 1.9 2.4% 3.7% 11.0% 10.4% 5.9% 5.7% Copec Pulp & Paper 7,125 11,200 HOLD 13,378 7.7 11.1 11.4 6.8 6.9 1.3 3.7% 3.6% 10.4% 9.6% 4.8% 4.4% Embonor-B Food & Beverages 1,549 1,980 BUY 1,073 0.7 15.4 14.5 7.6 7.2 2.4 4.7% 5.0% 13.6% 13.7% 6.8% 6.9% Enel Americas Utilities 113.6 120.0 HOLD 9,427 13.4 10.6 0.2 0.1 4.4 3.9 2.3 6.4% 7.0% 15.3% 15.4% 4.7% 5.7% Enel Chile Utilities 64 74 HOLD 6,394 5.8 2.0 0.2 0.2 6.4 5.8 1.3 5.7% 6.5% 11.7% 13.2% 5.4% 6.3% Engie Chile Utilities 1,236.2 1,450.0 BUY 1,881 2.1 10.8 10.2 5.8 5.5 0.9 4.1% 9.3% 8.3% 8.5% 5.0% 5.3% Entel Telecom & IT 6,806 6,550 HOLD 2,969 2.8 39.9 30.0 7.4 6.8 1.6 0.0% 0.8% 4.1% 5.3% 1.4% 1.8% Falabella Retail 4,249.9 5,400.0 HOLD 15,402 17.3 19.2 16.1 12.2 10.5 2.3 1.4% 2.1% 10.3% 11.4% 3.6% 4.1% Forus Retail 1,690 2,310 BUY 631 0.5 16.6 15.1 9.5 8.7 2.0 2.4% 2.4% 11.8% 12.0% 10.5% 10.8% Habitat Financials 920 1,260 BUY 1,330 0.2 9.4 8.3 6.3 5.8 2.5 7.4% 7.4% 25.8% 26.8% 20.4% 21.3% Hites Retail 420 500 HOLD 229 0.2 14.5 11.4 10.6 9.1 1.2 2.6% 3.5% 7.8% 9.3% 3.2% 3.7% ILC Conglomerates 11,682.0 14,200.0 BUY 1,687 1.2 11.3 9.7 nm nm 1.7 4.4% 4.1% nm nm nm nm Itau Corpbanca Banks 6 8 BUY 4,214 3.0 0.2 12.2 9.7 nm nm 0.9 2.4% 2.9% 7.0% 8.3% 0.8% 0.9% Masisa Materials 45 43 HOLD 510 0.3 51.0 140.3 10.9 12.4 0.5 2.2% 1.0% 1.0% 0.4% 0.8% 0.3% Parque Arauco Real Estate 1,856 1,970 HOLD 2,418 1.9 17.0 19.9 17.6 16.8 4.8 3.2% 3.2% 10.8% 8.8% 4.2% 3.4% Quiñenco Conglomerates 1,800 2,135 HOLD 4,323 0.9 17.3 16.8 nm nm 1.0 5.5% 5.9% nm nm nm nm Ripley Retail 533 663 HOLD 1,491 1.6 14.1 12.8 19.2 17.4 1.1 4.1% 4.3% 7.6% 8.2% 2.5% 2.7% Security Conglomerates 268 330 HOLD 1,431 0.9 9.3 8.7 nm nm 1.4 5.2% 6.2% 13.7% 13.6% 0.9% 0.9% SK Industrial 1,252 1,373 BUY 1,944 0.3 16.2 13.2 8.3 7.2 1.5 3.5% 4.8% 9.0% 10.6% 3.3% 3.9% SM-ChileB Conglomerates 340 332 HOLD 5,891 1.8 39.6 31.8 nm nm 2.9 0.9% 0.9% 7.0% 8.3% 1.3% 1.3% SMU Retail 177 247 BUY 1,472 0.9 20.4 16.6 9.3 8.7 2.1 0.0% 0.0% 6.8% 7.8% 2.8% 3.5% Sonda Telecom & IT 936 1,070 HOLD 1,177 1.3 32.9 22.0 10.2 8.6 1.6 0.7% 1.7% 4.9% 7.1% 2.6% 3.6% SQM-B Materials 21,600 34,600 HOLD 8,088 15.3 34.1 22.3 19.7 10.5 9.6 3.9 5.2% 4.3% 17.9% 20.2% 8.6% 9.5% Chile Sample 4,951 6,150 150,095 135.6 14.2 12.8 8.1 7.4 1.6 4.1% 4.3% 10.9% 11.7% 2.3% 2.4%
Source: Company Reports, Credicorp Capital, & Bloomberg. For LATAM, EV/EBITDAR
17 Colombia
ADTV P/E FV/EBITDA P/BV Div Yield. ROAE ROAA Company Sector Px Last Px Target Rating Mkt. Cap Local ADR 2019E 2020E 2019E 2020E LTM 2019E 2020E 2019E 2020E 2019E 2020E Avianca Transport 1,510 2,160 UPERF 460 0.3 0.5 nm nm 4.8 4.5 0.4 0.0% 0.0% -2.3% -5.1% -0.4% -0.7% Bancolombia Banks 39,760 36,900 BUY 11,419 6.0 15.2 12.8 10.8 nm nm 1.7 2.8% 3.0% 11.9% 13.0% 1.3% 1.4% BVC Financials 12,380 13,300 BUY 229 0.2 13.7 13.3 7.7 7.5 1.6 5.9% 5.1% 11.5% 11.4% 8.9% 8.9% Canacol Oil & Gas 9,900 10,680 HOLD 537 0.1 1.1 5.3 4.9 3.0 2.7 2.3 0.0% 0.0% 35.2% 28.0% 12.1% 11.5% Cemargos Cement & Construction 7,350 9,900 BUY 2,968 2.1 42.8 41.9 10.3 10.2 1.3 3.4% 3.5% 2.9% 3.1% 1.3% 1.3% CLH Cement & Construction 4,525 5,700 HOLD 770 0.5 12.8 10.3 7.3 6.7 0.5 0.0% 0.0% 3.9% 4.7% 2.0% 2.5% Davivienda Banks 39,400 41,500 BUY 5,441 1.3 10.3 8.9 nm nm 1.7 2.3% 2.9% 14.7% 15.2% 1.5% 1.6% Ecopetrol Oil & Gas 2,875 3,580 HOLD 36,144 10.3 21.7 8.4 6.8 4.2 3.9 2.3 7.7% 7.7% 23.9% 26.5% 10.8% 13.1% Éxito Retail 14,080 16,150 HOLD 1,927 1.5 10.7 8.8 5.8 5.8 0.9 2.2% 4.6% 7.3% 8.5% 0.9% 1.0% Grupo Argos Conglomerates 17,020 21,500 HOLD 4,265 1.9 25.4 20.0 9.6 8.5 0.9 2.1% 2.1% 3.6% 4.5% 1.2% 1.6% Grupo Aval Banks 1,170 1,400 HOLD 7,971 2.0 1.7 9.4 8.2 nm nm 1.6 4.3% 4.7% 15.4% 16.7% 1.9% 1.9% Grupo Sura Conglomerates 33,440 39,100 HOLD 5,797 4.0 12.1 11.3 nm nm 0.8 1.6% 1.7% 6.3% 6.4% 2.2% 2.2% Nutresa Food & Beverages 25,900 31,900 BUY 3,644 1.1 17.5 15.3 8.6 7.8 1.4 2.2% 2.5% 5.3% 5.9% 3.1% 3.4% Colombia Sample 1,510 1,720 97,196 36.0 15.1 13.2 7.3 6.7 1.0 4.9% 5.4% 12.4% 14.5% 2.6% 3.0%
Source: Company Reports, Credicorp Capital, & Bloomberg
18 Peru
ADTV P/E FV/EBITDA P/BV Div Yield. ROAE ROAA Company Sector Px Last Px Target Rating Mkt. Cap Local ADR 2019E 2020E 2019E 2020E LTM 2019E 2020E 2019E 2020E 2019E 2020E Aceros Arequipa Materials 0.70 0.85 BUY 298 0.0 5.1 6.0 3.7 4.0 0.5 7.1% 7.0% 9.4% 7.6% 4.9% 3.9% Alicorp Food & Beverages 10.55 13.00 HOLD 2,695 1.0 15.9 13.8 11.2 10.2 3.1 2.6% 3.1% 16.7% 17.5% 6.0% 6.7% Cementos Pacasmayo Cement & Construction 5.8 8.1 HOLD 742 0.3 0.1 16.9 14.5 8.4 7.9 1.6 5.2% 5.9% 9.4% 10.8% 5.1% 5.9% Cerro Verde Mining 20.00 28.30 BUY 7,001 0.1 10.9 10.8 4.5 4.5 1.3 2.5% 2.8% 11.0% 10.4% 7.8% 7.5% Enel Generacion Peru Utilities 2.3 2.6 BUY 1,931 0.0 11.7 11.2 6.9 6.6 2.1 5.5% 5.6% 17.9% 17.5% 12.7% 12.8% Enel Distribucion Peru Utilities 5.40 6.85 HOLD 1,033 0.1 9.0 8.6 6.0 5.7 1.8 4.4% 4.7% 17.1% 16.3% 8.1% 7.9% Engie Peru Utilities 6.1 7.8 HOLD 1,090 0.2 10.0 9.4 6.4 6.3 1.0 5.6% 7.0% 9.6% 9.8% 5.0% 5.3% Ferreycorp Materials 2.20 3.00 BUY 643 0.5 7.3 7.6 6.4 6.2 1.0 6.7% 9.6% 12.8% 11.6% 5.6% 5.2% Graña y Montero Cement & Construction 2.2 2.5 HOLD 470 0.2 0.4 15.6 13.0 5.4 4.7 0.7 0.0% 2.8% 4.5% 5.2% 1.2% 1.5% IFS Conglomerates 43.87 49.00 BUY 4,962 0.7 11.6 10.6 nm nm 2.6 4.0% 4.8% 18.9% 18.7% 2.1% 2.1% InRetail Retail 37.0 43.8 BUY 3,804 2.0 26.9 18.3 13.1 11.9 3.1 0.9% 0.5% 10.9% 14.4% 3.4% 4.7% Luz del Sur Utilities 12.37 13.75 HOLD 1,805 0.2 14.1 13.5 9.9 9.4 2.3 4.9% 5.0% 15.6% 15.5% 7.1% 7.0% Minsur Mining 1.7 2.0 BUY 1,425 0.2 28.1 22.0 7.8 7.9 1.1 0.0% 0.0% 3.9% 4.8% 2.0% 2.5% Unacem Cement & Construction 2.43 3.45 BUY 1,324 0.2 9.3 8.7 6.4 6.4 1.1 2.3% 2.2% 10.9% 10.6% 4.5% 4.8% Volcan Mining 0.6 1.0 HOLD 2,116 0.4 24.9 23.7 9.3 9.0 3.2 1.8% 1.7% 12.0% 11.8% 3.7% 3.8% Peru Sample 20,299 23,400 34,562 25.5 14.4 12.5 7.4 6.8 1.9 2.7% 3.0% 12.1% 12.2% 5.4% 5.7%
Source: Company Reports, Credicorp Capital, & Bloomberg
19 Economic Forecasts
June 2019
20 Economic Forecasts
CHILE National Accounts (YoY) 2015 2016 2017 2018 2019F 2020F Current GDP (USDmm) 244,417 250,266 277,184 299,148 307,689 331,486 GDP (%) 2.3 1.3 1.5 4.0 3.0 3.3 Domestic Demand (% v ar.) 2.5 1.3 3.1 4.7 3.6 3.7 Total Consumption (% v ar.) 2.6 2.9 2.7 3.7 3.2 3.3 Inv estment / GDP 23.8 22.9 21.6 21.7 22.2 22.6 CPI 4.4 2.7 2.3 2.6 2.6 3.0 Reference rate (end of y ear) 3.50 3.50 2.50 2.75 2.50 3.25 Ex change rate (end of y ear) 709 667 615 696 650 640 Ex change rate (av g.) 655 677 649 640 655 645 Fiscal Balance (% GDP) -2.2 -2.7 -2.8 -1.7 -1.7 -1.4 Foreign Reserves (USDmm) 38,643 40,494 38,983 39,861 40,000 41,000 Source: INE, BCCh, Dipres & Credicorp Capital Estimates
PERU National Accounts (YoY) 2015 2016 2017 2018 2019F 2020F Current GDP (USDmm) 191,517 194,745 214,332 225,259 229,800 235,500 GDP (%) 3.3 4.0 2.5 4.0 3.7 3.7 Domestic Demand (% v ar.) 2.9 1.1 1.4 4.3 3.8 3.7 Total Consumption (% v ar.) 4.9 2.8 2.2 3.6 3.6 3.6 Inv estment / GDP 23.8 22.2 20.9 21.8 22.1 22.4 CPI 4.4 3.2 1.4 2.2 2.3 2.5 Ov ernight interest rate (end of y ear) 3.75 4.25 3.25 2.75 2.75 2.75 Ex change rate (end of y ear) 3.41 3.36 3.24 3.37 3.35-3.40 3.35-3.40 Ex change rate (av g.) 3.19 3.38 3.26 3.29 3.30-3.35 3.35-3.40 Fiscal Balance (% GDP) -2.1 -2.6 -3.1 -2.5 -2.1 -2.2 Foreign Reserves (USDmm) 61,485 61,686 63,621 60,121 64,500 67,300 Source: INEI, BCR & Credicorp Capital Estimates
COLOMBIA National Accounts (YoY) 2015 2016 2017 2018 2019F 2020F Current GDP (USDmm) 293,321 283,148 314,458 330,083 342,149 370,470 GDP (%) 3.0 2.1 1.4 2.7 3.3 3.2 Domestic Demand (% v ar.) 2.4 1.2 1.2 3.8 4.2 3.6 Total Consumption (% v ar.) 3.4 1.6 2.4 3.9 3.9 3.4 Inv estment / GDP 23.8 23.2 22.2 22.4 22.9 23.1 CPI 6.8 5.8 4.1 3.2 3.3 3.2 Ov ernight interest rate (end of y ear) 5.75 7.50 4.75 4.25 4.50 5.00 Ex change rate (end of y ear) 3,175 3,002 2,984 3,249 3,000 2,900 Ex change rate (av g.) 2,760 3,051 2,951 2,957 3,050 2,950 Fiscal Balance (% GDP) -3.0 -4.0 -3.6 -3.1 -2.6 -2.4 Foreign Reserves (USDmm) 46,741 46,683 47,637 48,402 50,402 51,507 Source: DANE, BanRep, Bloomberg & Credicorp Capital Estimates
21 Important Disclosures
This research report was prepared by Credicorp Capital Peru S.A and/or Credicorp Capital Colombia Sociedad Comisionista de Bolsa and/or Credicorp Capital S.A. Corredores de Bolsa, companies authorized to engage in securities activities in Peru, Colombia and Chile, respectively and indirect subsidiaries of Credicorp Capital Ltd. (jointly referred to as “Credicorp Capital”). None of the companies jointly referred to as Credicorp Capital are registered as broker-dealers in the United States and, therefore, they are not subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. This research report is provided for distribution only to “major U.S. institutional investors” in reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any U.S. recipient of this research report wishing to effect any transaction to buy or sell securities or related financial instruments based on the information provided in this research report can do so only through Credicorp Capital Securities Inc., a registered broker-dealer in the United States. Under no circumstances may a U.S. recipient of this research report effect any transaction to buy or sell securities or related financial instruments directly through Credicorp Capital. CCSI or any of its representatives are not involved in any way in the preparation, development, or supervision of the research report and does not have any influence whatsoever over the research content. Any analyst whose name appears on this research report is not registered or qualified as a research analyst with the Financial Industry Regulatory Authority (“FINRA”) and is not a registered representative of Credicorp Capital Securities Inc. and, therefore, is not subject to applicable restrictions under FINRA Rules on communications with a subject company, public appearances and trading securities held by a research analyst account.
A. Analyst Disclosures The functional job title of the person(s) responsible for the recommendations contained in this report is Equity Research Analyst unless otherwise stated on the cover.
Regulation AC - Analyst Certification: Each Equity Research Analyst listed on the front-page of this report is principally responsible for the preparation and content of all or any identified portion of this research report and hereby certifies that with respect to each issuer or security or any identified portion of the report with respect to an issuer or security that the Equity Research Analyst covers in this research report, all of the views expressed in this research report accurately reflect their personal views about those issuer(s) or securities. Each Equity Research Analyst also certifies that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or view(s) expressed by that Equity Research Analyst in this research report. Each Equity Research Analyst certifies that he or she is acting independently and impartially from the referenced company/shareholders, directors and is not affected by any current or potential conflict of interest that may arise from any of the companies’ activities. Analyst Compensation: The research analyst(s) primarily responsible for the preparation of the content of this research report attest(s) that no part of his or her compensation was, is or will be, directly or indirectly, related to the specific recommendations that he or she expressed in the research report. The equity research analysts responsible for the preparation of this report receive compensation based upon various factors, including the quality and accuracy of research, client feedback, competitive factors, and overall firm revenues. Registration of non-US Analysts: Unless otherwise noted, the non-US analysts listed on the front of this report are employees of one of the companies jointly referred as Credicorp Capital, which are non-US affiliates of Credicorp Capital Securities Inc., a SEC registered and FINRA member broker-dealer. Equity Research Analysts employed by the companies jointly referred as Credicorp Capital, are not registered/ qualified as research analysts under FINRA/NYSE rules, are not registered representatives of Credicorp Capital Securities Inc. and may not be subject to NASD Rule 2711 and NYSE Rule 472 restrictions on communications with covered companies, public appearances, and trading securities held by a research analyst account. Please refer to www.credicorpcapital.com for further information relating to research and conflict of interest management.
22 B. Ownership and Material Conflicts of Interest
Other significant financial interests
Credicorp Capital Securities Inc. or its affiliates ´beneficially own´ securities issued by the companies referenced in this report according to the following table:
Type of instruments Equal or less than USD 50,000 Equal or less than USD 100,000 Equal or less than USD 500,000 Equal or less than USD 1,000,000 More than USD 1,000,000 Other equity securities - Minsur - - AESGener, Aguas Andinas, Banco de Chile, BCI, Cencosud, CMPC, Colbun, Itaucorp, ECL, Falabella, LATAM Airlines, Ripley, Santander Chile, Security, Debt securities Entel - Davivienda, IFS ETB SQM, Ecopetrol, Grupo Aval, Alicorp, Cementos Pacasmayo, Enel GX Peru, Enel DX Peru, Engie Peru, Luz del Sur, Milpo, Minsur, Unacem, Volcan Avianca, Bancolombia, Celcia, Cemargos, Cemex Latam Deriv ativ es on equity /debt Holdings, Ecopetrol, EEB, Éxito, - - - - securities Grupo Argos, Grupo Aval, ISA, Nutresa
The research analyst(s) primarily responsible for the preparation of the content of this research report or their household members ´beneficially own´ securities issued by the companies referenced in this report according to the following table:
Type of instruments Equal or less than USD 10,000 Equity securities BCI, Ferreycorp, and InRetail Debt securities - Derivatives on equity/debt - securities C. Compensation and Investment Banking Activities
Credicorp Capital Securities Inc. or its affiliates have managed or co-managed a public offering of securities, in the past 12 months, for the following company(ies): Davivienda, ISA, Alicorp, Engie Peru and Luz del Sur. Credicorp Capital Securities Inc. or its affiliates currently have or had, within the past 12 months, the following company(ies) as investment banking client(s): Davivienda, EEB, ISA, Aceros Arequipa, AIH, Alicorp, Buenaventura, Cementos Pacasmayo, Engie Peru, Ferreycorp, Graña y Montero, IFS, InRetail, Luz del Sur, Milpo and Volcan. Credicorp Capital Securities Inc. or its affiliates also have received compensation, within the past 12 months, for investment banking services from the following company(ies): Davivienda, GEB, ISA, Aceros Arequipa, AIH, Alicorp, Buenaventura, Cementos Pacasmayo, Engie Peru, Ferreycorp, Graña y Montero, IFS, InRetail, Luz del Sur, Milpo and Volcan. Credicorp Capital Securities Inc. or its affiliates also expect to receive or intend to seek compensation, in the next 3 months, for investment banking services from the following company (ies): Davivienda, GEB, ISA, Aceros Arequipa, AIH, Alicorp, Buenaventura, Cementos Pacasmayo, Engie Peru, Ferreycorp, Graña y Montero, IFS, InRetail, Luz del Sur, Milpo and Volcan.
D. Other Compensation and Non-Investment Banking Activities
Credicorp Capital Securities Inc. or its affiliates currently provide or have provided, within the past 12 months, non-investment-banking securities-related services to the following company(ies): Banco de Chile, BCI, Copec, ItauCorpbanca, EISA, Falabella, Habitat,, Santander, SMU, Hites, Avianca, Banco de Bogota, Bancolombia, BVC, Cemargos, Davivienda, Ecopetrol, EEB, ETB, Exito, Grupo Argos, Grupo Sura, ISA, Nutresa, and Promigas.
23 Credicorp Capital Securities Inc. or its affiliates also have received compensation, within the past 12 months, for non-investment-banking securities-related services from the following company(ies): Banco de Chile, BCI, Copec, ItauCorpbanca, EISA, Falabella, Habitat,, Santander, SMU, Hites, Avianca, Banco de Bogota, Bancolombia, BVC, Cemargos, Davivienda, Ecopetrol, EEB, ETB, Exito, Grupo Argos, Grupo Sura, ISA, Nutresa, and Promigas. Credicorp Capital Securities Inc. or its affiliates currently provides or have provided, within the past 12 months, non-securities-related services to the following company(ies): Banco de Chile, BCI, ItauCorpbanca, Forus, Habitat, LATAM, Santander, SK, Banco de Bogota, Bancolombia, Davivienda, Aceros Arequipa, AIH, Alicorp, Cementos Pacasmayo, Cerro Verde, Enel Dx Peru, Enel Gx Peru, Engie Peru, Ferreycorp, Graña y Montero, Luz del Sur, Milpo, and Unacem. Credicorp Capital Securities Inc. or its affiliates also have received compensation, within the past 12 months, for non-securities services from the following company(ies): Banco de Chile, BCI, ItauCorpbanca, Forus, Habitat, LATAM, Santander, SK, Banco de Bogota, Bancolombia, Davivienda, Aceros Arequipa, AIH, Alicorp, Cementos Pacasmayo, Cerro Verde, Enel Dx Peru, Enel Gx Peru, Engie Peru, Ferreycorp, Graña y Montero, Luz del Sur, Milpo, and Unacem. E. Market Making Cedicorp Capital Securities Inc. or its affiliates act as market maker in the following company(ies): Almendral, Besalco, Invercap, Masisa, Quiñenco, Ripley, Grupo Security, SM SAAM, Enjoy, BVC, EEB, ETB, Alicorp, Cementos Pacasmayo, Engie Energia Peru and Ferreycorp. F. Rating System Stock ratings are based on the analyst’s expectation of the stock’s total return during the twelve to eighteen months following assignment of the rating. This view is based on the target price, set as described below, and on the analyst’s opinion, general market conditions and economic developments. Buy: Expected returns of 5 percentage points or more in excess over the expected return of the local index, over the next 12-18 months. Hold: Expected returns of +/- 5% in excess/below the expected return of the local index over the next 12-18 months. Underperform: Expected to underperform the local index by 5 percentage points or more over the next 12-18 months. Under Review: Company coverage is under review. The IPSA, COLCAP and IGBVL indexes are the selective equity indexes calculated by the Bolsa de Comercio de Santiago, the Bolsa de Valores de Colombia, and the Bolsa de Valores de Lima, respectively. In making a recommendation, the analyst compares the target price with the actual share price, and compares the resulting expected return for the IPSA, the COLCAP, and/or the SPBVL indexes, as estimated by Credicorp Capital S.A. Corredores de Bolsa, Credicorp Capital Colombia Sociedad Comisionista de Bolsa, and/or CredicorpCapital Peru S.A, and then makes a recommendation derived from the difference in upside potential between the shares and the respective index. G. Distribution of Ratings
Buy Hold Underperform Restricted / UR
Companies covered with this rating 36% 46% 6% 13%
Compensation for investment banking 40% 31% 25% 0% services in the past 12 months*
*Percentage of investment banking clients in each rating category. H. Price Target Unless otherwise stated in the text of this report, target prices in this report are based on either a discounted cash flow valuation or comparison of valuation ratios with companies seen by the analyst as comparable or a combination of the two methods. The result of this fundamental valuation is adjusted to reflect the analyst’s views on the likely course of investor sentiment. Whichever valuation method is used there is a significant risk that the target price will not be achieved within the expected timeframe. Risk factors include unforeseen changes in competitive pressures or in the level of demand for the company’s products. Such demand variations may result from changes in technology, in the overall level of economic activity or, in some cases, in fashion. Valuations may also be affected by changes in taxation, in exchange rates and, in certain industries, in regulations. Investment in overseas markets and instruments such as ADRs can result in increased risk from factors such as exchange rates, exchange controls, taxation, and political and social conditions. This discussion of valuation methods and risk factors is not comprehensive – further information is available upon request.
24 II.ADDITIONAL DISCLOSURES
This product is not for retail clients or private individuals.
The information contained in this publication was obtained from various publicly available sources believed to be reliable, but has not been independently verified by the companies jointly referred as Credicorp Capital, therefore they do not warrant the completeness or accuracy of such information and does not accept any liability with respect to the accuracy or completeness of such information, except to the extent required by applicable law. This publication is a brief summary and does not purport to contain all available information on the subjects covered. Further information may be available on request. This report may not be reproduced for further publication unless the source is quoted. This publication is for information purposes only and shall not be construed as an offer or solicitation for the subscription or purchase or sale of any securities, or as an invitation, inducement or intermediation for the sale, subscription or purchase of any securities, or for engaging in any other transaction. This publication is not for private individuals.
Any opinions, projections, forecasts or estimates in this report are those of the author only, who has acted with a high degree of expertise. They reflect only the current views of the author at the date of this report and are subject to change without notice. The companies jointly referred to as Credicorp Capital have no obligation to update, modify or amend this publication or to otherwise notify a reader or recipient of this publication in the event that any matter, opinion, projection, forecast or estimate contained herein, changes or subsequently becomes inaccurate, or if research on the subject company is withdrawn. The analysis, opinions, projections, forecasts and estimates expressed in this report were in no way affected or influenced by the issuer. The author of this publication benefits financially from the overall success of Credicorp Capital. The investments referred to in this publication may not be suitable for all recipients. Recipients are urged to base their investment decisions upon their own appropriate investigations that they deem necessary. Any loss or other consequence arising from the use of the material contained in this publication shall be the sole and exclusive responsibility of the investor and Credicorp Capital accepts no liability for any such loss or consequence. In the event of any doubt about any investment, recipients should contact their own investment, legal and/or tax advisers to seek advice regarding the appropriateness of investing. Some of the investments mentioned in this publication may not be readily liquid investments. Consequently it may be difficult to sell or realize such investments. The past is not necessarily a guide to future performance of an investment. The value of investments and the income derived from them may fall as well as rise and investors may not get back the amount invested. Some investments discussed in this publication may have a high level of volatility. High volatility investments may experience sudden and large falls in their value which may cause losses. International investing includes risks related to political and economic uncertainties of foreign countries, as well as currency risk.
To the extent permitted by applicable law, no liability whatsoever is accepted for any direct or consequential loss, damages, costs or prejudices whatsoever arising from the use of this publication or its contents.
This report may not be independent of Credicorp Capital’s proprietary interests. Credicorp Capital trades the securities covered in this report for its own account and on a discretionary basis on behalf of certain clients. Such trading interests may be contrary to the recommendation(s) offered in this report
Credicorp Capital (and its affiliates) has implemented written procedures designed to identify and manage potential conflicts of interest that arise in connection with its research business, which are available upon request. The Credicorp Capital research analysts and other staff involved in issuing and disseminating research reports operate independently of Credicorp Capital’s Investment Banking business. Information barriers and procedures are in place between the research analysts and staff involved in securities trading for the account of Credicorp Capital or clients to ensure that price sensitive information is handled according to applicable laws and regulations.
25 Credicorp Capital Securities Inc., is a wholly owned subsidiary of Credicorp Capital Ltd.
Nothing herein excludes or restricts any duty or liability to a customer that Credicorp Capital Securities Inc. have under applicable law. Investment products provided by or through Credicorp Capital Securities Inc. are not insured by the Federal Deposit Insurance Corporation and are not deposits or other obligations of any insured depository institution, may lose value and are not guaranteed by the entity that published the research as disclosed on the front page and are not guaranteed by Credicorp Capital Securities Inc.
Investing in non-U.S. Securities may entail certain risks. The securities referred to in this report and non-U.S. issuers may not be registered under the U.S. Securities Act of 1933, as amended, and the issuer of such securities may not be subject to U.S. reporting and/or other requirements. Rule 144A securities may be offered or sold only to persons in the U.S. who are Qualified Institutional Buyers within the meaning of Rule 144A under the Securities Act. The information available about non-U.S. companies may be limited, and non-U.S. companies are generally not subject to the same uniform auditing and reporting standards as U.S. companies. Securities of some non-U.S. companies may not be as liquid as securities of comparable U.S. companies. Securities discussed herein may be rated below investment grade and should therefore only be considered for inclusion in accounts qualified for speculative investment.
Analysts employed by one of the companies jointly referred to as Credicorp Capital, all of which are non-U.S. broker-dealers, are not required to take the FINRA analyst exam. The information contained in this report is intended solely for certain "major U.S. institutional investors" and may not be used or relied upon by any other person for any purpose. Such information is provided for informational purposes only and does not constitute a solicitation to buy or an offer to sell any securities under the Securities Act of 1933, as amended, or under any other U.S. federal or state securities laws, rules or regulations. The investment opportunities discussed in this report may be unsuitable for certain investors depending on their specific investment objectives, risk tolerance and financial position.
In jurisdictions where Credicorp Capital Securities Inc. is not registered or licensed to trade in securities, or other financial products, transactions may be executed only in accordance with applicable law and legislation, which may vary from jurisdiction to jurisdiction and which may require that a transaction be made in accordance with applicable exemptions from registration or licensing requirements.
The information in this publication is based on sources believed to be reliable, but Credicorp Capital Securities Inc. does not make any representation with respect to its completeness or accuracy. All opinions expressed herein reflect the author's judgment at the original time of publication, without regard to the date on which you may receive such information, and are subject to change without notice.
Credicorp Capital Securities Inc. or its affiliates may have issued other reports that are inconsistent with, and reach different conclusions from, the information presented in this report. These publications reflect the different assumptions, views and analytical methods of the analysts who prepared them. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is provided in relation to future performance.
Credicorp Capital Securities Inc. and any company affiliated with it may, with respect to any securities discussed herein: (a) take a long or short position and buy or sell such securities; (b) act as investment and/or commercial bankers for issuers of such securities; (c) act as market makers for such securities; (d) serve on the board of any issuer of such securities; and (e) act as paid consultant or advisor to any issuer. The information contained herein may include forward-looking statements within the meaning of U.S. federal securities laws that are subject to risks and uncertainties. Factors that could cause a company's actual results and financial condition to differ from expectations include, without limitation: political uncertainty, changes in general economic conditions that adversely affect the level of demand for the company's products or services, changes in foreign exchange markets, changes in international and domestic financial markets and in the competitive environment, and other factors relating to the foregoing. All forward-looking statements contained in this report are qualified in their entirety by this cautionary statement.
Other countries: Laws and regulations of other countries may also restrict the distribution of this report. Persons in possession of this document should inform themselves about possible legal restrictions and observe them accordingly.
26 CONTACT LIST
ANDEAN RESEARCH TEAM SALES & TRADING
Daniel Velandia, CFA Felipe García Head of Research & Chief Economist Head of Sales & Trading [email protected] [email protected] # (571) 339 4400 Ext 1505 # (571) 339 4400 Ext. 1132
EQUITY RESEARCH EQUITY SALES & TRADING
Carolina Ratto Mallie Andre Suaid Head of Equity Research - Retail Head Equities Regional [email protected] [email protected] # (562) 2446 1768
CHILE PERU COLOMBIA CHILE PERU COLOMBIA
Tomás Sanhueza Daniel Córdova Sebastián Gallego, CFA René Ossa Rodrigo Zavala Juan A. Jiménez Head of Equity Research - Consumer & Head of Equity Research Peru Head of Equity Research - Banks Head of Equity Head of Equity - Peru Head of International Equity Sales Transport. [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] # (511) 416 3333 Ext 33052 # (571) 339 4400 Ext 1594 # (562) 2651 9324 # (511) 313 2918 Ext 36044 # (571) 339 4400 Ext 1701 # (562) 2446 1751 Steffania Mosquera German Barousse Renzo Castillo Santiago Castro Ezequiel Fernández Luis Vicente Senior Analyst: Cement & Construction, Vice President Equity Sales Equities Sales International Sales & Trading VP Utilities Senior Analyst: Mining & Utilities Non Bank financials [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] # (562) 2450 1637 # (511) 416 3333 Ext 36167 # (571) 339 4400 Ext 1344 # (562) 2651 9344 # (511) 416 3333 Ext 37854 # (571) 339 4400 Ext 1025 Ursula Mitterhofer Maria Fernanda Luna Credicorp Capital Securities INC Andrés Cereceda Daniel Mora Senior Associate Sales & Trading Equities Sales Associate: Pulp & Paper, Materials, Analyst [email protected] [email protected] Healthcare, Pension Funds [email protected] # (562) 2450 1613 # (511) 416 3333 Ext 36182 Rafael Solis [email protected] # (571) 339 4400 Ext 1609 Institutional Equity Sales # (562) 2446 1798 Cristóbal Grez Credicorp Capital UK Ltd. [email protected] Associate Equity Sales # (786) 999 1619 Joel Lederman [email protected] Marilyn Macdonald Associate - Retail # (562) 2450 1629 International Equity Sales David Crummy [email protected] [email protected] Equity Sales Trader # (562) 2651 9332 Ana María Bauzá # (4477) 7151 5855 [email protected] Corporate Access # (786) 999 1618 Felipe Navarro [email protected] Senior Analyst: Construction, Industrial & Ports # (562) 2450 1609 [email protected] # (562) 2450 1688
Macarena Ossa Analyst [email protected] # (562) 2450 1694
FIXED INCOME & ECONOMICS RESEARCH FIXED INCOME SALES & TRADING
CHILE PERU COLOMBIA Andrés Nariño Alfredo Bejar Director Sales Offshore Head of International FI Josefina Valdivia Juan Pablo Brosset Camilo A. Durán [email protected] [email protected] Head of Fixed Income Fixed Income Analyst Macro Analyst # (571) 339-4400 Ext. 1459 # (511) 205 9190 Ext 36148 [email protected] [email protected] [email protected] # (562) 2651 9308 # (511) 416 3333 Ext 36018 # (5511) 339 4400 Ext. 1383 CHILE PERU COLOMBIA
Ignacio Sabelle Guido Riquelme Evangeline Arapoglou Carlos Sanchez Fixed Income Analyst Head of Sales Head of international FI Sales Head of Fixed Income [email protected] [email protected] [email protected] [email protected] # (562) 2651 9368 # (562) 2446 1712 # (511) 416 3333 Ext 36099 # (571) 323 9154
Felipe Guzmán Juan Francisco Mas Andrés Valderrama Gustavo Trujillo Senior Economist Fixed Income Sales Fixed Income Sales Head of Sales [email protected] [email protected] [email protected] [email protected] # (562) 2651 9385 # (562) 2446 1720 # (511) 416 3333 Ext 40352 # (571) 323 9252
Rafael Gaete Natalia Jurado Andrés Agudelo Local Fixed Income Sales Fixed Income Sales Fixed Income Sales [email protected] [email protected] [email protected] # (562) 2651 9336 # (511) 416 3333 Ext 36027 # (571) 339 4400 Ext 1180
Diego Hidalgo Guillermo Arana Emilio Luna Local Fixed Income Sales Fixed Income Sales Fixed Income Sales [email protected] [email protected] [email protected] # (562) 2450 1693 # (511) 313 2902 Ext. 36144 # (571) 339 4400
Lizeth Espiritu Patricio Luza Fixed Income Sales Fixed Income Sales [email protected] [email protected] Credicorp Capital Securities INC # (562) 2450 1619 # (511) 416 3333 Ext. 36168
Carla Tejada Jhonathan Rico Fixed Income Analyst Fixed Income Trader [email protected] [email protected] # (511) 416 3333 Ext. 36143 # 1 (786) 9991614
Ana Lucía Rondón Medina Sales Renta Fija Michael Tafur [email protected] Fixed Income # (511) 416 3333 Ext. 40339 [email protected] # 1 (786) 9991607
27