Although Chile has a 1-in-50 chance of winning the World Cup, brokers on the Santiago exchange are best in the world at ducking away to watch the games. Photo: Martin Bernetti

Santiago — If you’re planning to trade Chilean stocks during the World Cup, forget it.

Though the team has a 1-in-50 chance of winning the month-long tournament that starts on Thursday, investors on the Santiago exchange are best in the world at ducking away to watch the games. Transactions fell more than 99 percent when the national team was playing in 2010, according to a European Central Bank 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 percent.

“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 televisions and all the trading desks have them. Chileans always get overexcited about our team.”

With a week to go before the start of the world’s biggest and most-watched sporting event, traders from Argentina to Japan are readying themselves for a drop-off in business. Transactions even in developed countries such as the US thinned out during the 2010 games in South Africa as buyers and sellers put watching soccer before global politics and economic reports, according to the ECB’s 2012 study.

In the 2010 tournament, Chilean traders were about as likely to stop work during matches that didn’t include the national team, which was ousted before the quarterfinals. Trading plunged 79 percent during games between other countries.

When Argentina’s national team was playing, trading tumbled 80 percent in Buenos Aires. Brazil’s team spurred a 75 percent decline in local volumes, while US games reduced trading by 43 percent. In European countries, volume dropped 38 percent on average. Trading typically fell in the build-up to matches and stayed below normal until 45 minutes after the end.

“Markets were following developments on the soccer pitch rather than in the trading pit,” ECB economists Michael Ehrmann and David-Jan Jansen wrote in the study. Ehrmann now works for the Bank of Canada in Ottawa, while Jansen is a researcher at the Dutch central bank in Amsterdam.

Chile’s obsession with the World Cup may be explained partly by its modern history, which left the country politically polarised and emotionally repressed, according to Patricio Carvajal, the co-ordinator of the center for social studies of soccer at the University of Chile in Santiago.

The military dictatorship that ruled from 1973 to 1990 imposed curfews and suspended the right to free assembly. Just 18 percent of the adult population attended at least one performing arts event in 2012, less than half the rate in the United States, based on data from the Chilean National Statistics Institute and the National Endowment for the Arts in the U.S.

“Chileans have few forums for emotional expression but soccer is a space where emotion is permitted,” Carvajal said a May 28 interview.

In the 2010 World Cup, Chile progressed to the second round before being knocked out. In 2014, the country has a 1.9 percent chance of winning, compared with favorite Brazil’s 22 percent, according to calculations by Bloomberg Sports.

Chile’s team is led by midfielder Arturo Vidal of the Italian professional club Juventus and forward Alexis Sanchez of Barcelona. It’s in one of the toughest groups, with Spain and the Netherlands, which placed first and second in 2010.

“Ardent Chilean fans are convinced that the best generation in the country’s soccer history should fear no one,” Tiago Severo, an economist at Goldman Sachs Group in New York, wrote on May 27 in a report analysing how national markets would react in the event of a World Cup victory.

The bank said winning countries’ markets typically outperform global stocks in the month after the final. Spain’s benchmark IBEX 35 returned 12 percent in the month after the 2010 World Cup, almost double the gains for the MSCI World Index.

Chile’s benchmark IPSA stock index has climbed 1 percent this year in dollar terms, trailing the 4.3 percent advance for the S&P’s 500 Index as well as the 4.9 percent increase in Brazil’s Ibovespa gauge.

President Michelle Bachelet urged companies on May 15 to allow flexibility for people to watch matches. She’s also planning to travel to Brazil to root for the Chilean team.

“All countries in Latin America fervently support their national side, but it seems that in Chile there is an emotional spillover into our working lives,” Carvajal said. “It’s an explosion of national sentiment. Chile’s soccer history is a history of defeat. It’s reclaiming suffering, adversity and struggle.” – BLoomberg