In my opinion, we still have DAP for a while.. Since the Central Bank started the cycle of rate hikes (TPM), taking it to its historical maximum (11.25%), there was a fever for Time Deposits, where unusual investors took advantage of opportunities for being an efficient and safe option for savings. Since June, the issuing entity began a new cycle, this time of cuts, accumulating to date a 300 bp drop (8.25%).

On previous occasions we have talked about how much the reductions would be applied, making it clear that the magnitude could vary depending on how the macroeconomic scenario behaves and its implications for the trajectory of inflation. It is precisely here, in the magnitude of reduction, where opportunities arise. While DAPS have lost their peak and the rush for this asset has been waning, they are still at high levels and far from declining to pre-pandemic levels. So it is not surprising that investors continue to appreciate this instrument as a clear savings option.

Rate reductions are expected to continue, given a restrictive policy and a controlled inflationary horizon to be managed by the BCCH. This, added to a more DOVISH scenario at the international level (FED), would give term deposits, specifically in 1y durations, a higher value, causing the market to seek to "pass through the till" in short terms, with supply mainly in issuers with good ratings which are not required to have so much premium, given their nature of solvent issuers and low risk (AAA), in areas where the accrual is lower; and a natural reenlistment would be sought in longer terms with a higher capital gain.

In simple words, SELL the short-term deposit y BUY the long-term depositby looking for better rates in issuers that offer a higher premium (Premium vs. Market Price).

Although higher risk issuers are the most susceptible to show needs, such as, for example, meeting daily obligations, cash deficit or liquidity indicators, 2nd Rating (AA) issuers sound attractive to invest in longer terms where the required premium (+60; +70 bps) is appreciated while waiting for the next rate decision. (Rolling Short).

Victor Valenzuela

Fixed Income / Domestic Financial Intermediation Instruments Operator