Thursday , July 7 2022

Weakness of the retail sector prevents Falabella from taking stock in stock


Market agents argue that there is also uncertainty about strong e-commerce entry.

At the end of July the actions of Falabella transacted near the $ 6,000. However, after the announcement of Linio's purchase and the capital increase that the company would make to finance that and other investments, the stock sank, and from there it did not recover.

Even after the placement of shares in the capital increase was determined, on October 19, the price of paper still fails to rise.

At the closing of Friday, at $ 5,215.8, the title accumulates a loss of 1.35% from the stock market. From the day before the announcement of the operation, the fall reaches 12.05%.

The purchase of Linio and the announcement of an alliance with Google to enter the electronic payment business were good decisions, according to local market agents, as they strengthen the position of the company in the face of e-commerce. Why, then, the action has failed to rise?

From the market point to a bad general performance of the sector. "The retail industry in general has shown a weak performance in Chile due to the sluggish consumption and employment figures, which is not clear that they will rebound significantly in 2019," explains María Luz Muñoz, Nevasa's market strategist, adding that This has impacted the results of both Falabella and Cencosud. According to René Le Fort, analyst at the MBI broker, the country's economic environment has not supported good results in the company. "Consumption has not gone very well and it hits all that sector," he says, adding that the entire sector is affecting "the imminent danger of Amazon."

That point in particular generates some doubts yet, operators say. Although Falabella has been actively preparing for the entry of international e-commerce players, there are still questions about how the retail dynamic will change with the arrival of Amazon, and what will mean that for the results of the firm. For Muñoz, in addition to quarterly reports under the expectations, there are several focuses on the horizon of Falabella. Added to the uncertainty linked to e-commerce, "there are short-term risks in the integration of Linio and then on the arrival of Ikea."

The remnant

Last week ended the subscription period of preferential option of the capital increase of the company, which ended with the acquisition of 12.3 million shares by controllers.

Considering that the auction in the stock market was 62.1 million papers and shareholders approved 84.3 million, the remainder left to place a total of 9.9 million shares. Although it is expected from the market that this sum can cause some price pressure, considering that it could mean an increase in the offer of shares of Falabella when they enter for sale, operators say it would not have a greater impact.

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