<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
THE CHILE FUND, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
THE CHILE FUND, INC.
- -------------------------------------------------------------------------------
CREDIT SUISSE ASSET MANAGEMENT
<PAGE>
- -------------------------------------------------------------------------------
THE CHILE FUND, INC.
NAV/MARKET PRICE COMPARISON*
Date of Inception: 9/27/89 Ticker: CH
COMPARATIVE DISCOUNT/PREMIUM REPORT
[GRAPH]
In the printed version of the document, a line graph appears which
depicts the following plot points:
<TABLE>
<CAPTION>
Date Discount (-)/Premium %
<S> <C>
9/26/89 1.45%
10/1/89 24.91%
10/6/89 31.87%
10/13/89 9.60%
10/20/89 27.26%
10/27/89 12.97%
10/31/89 15.12%
11/3/89 15.89%
11/10/89 12.98%
11/17/89 6.70%
11/24/89 8.05%
11/30/89 4.62%
12/1/89 4.99%
12/8/89 -4.54%
12/15/89 4.39%
12/22/89 2.88%
12/29/89 5.65%
1/6/90 17.06%
1/13/90 19.59%
1/20/90 15.11%
1/27/90 17.09%
1/31/90 27.58%
2/2/90 29.56%
2/9/90 21.72%
2/16/90 11.46%
2/23/90 8.53%
2/28/90 10.72%
3/2/90 8.02%
3/9/90 21.06%
3/16/90 5.87%
3/23/90 7.98%
3/30/90 11.32%
4/6/90 13.37%
4/13/90 15.08%
4/20/90 12.55%
4/27/90 6.82%
4/30/90 6.84%
5/4/90 7.83%
5/11/90 6.37%
5/18/90 3.70%
5/25/90 1.56%
5/31/90 -1.32%
6/1/90 -4.60%
6/8/90 8.44%
6/15/90 6.51%
6/22/90 8.04%
6/29/90 7.86%
7/6/90 11.15%
7/13/90 14.42%
7/20/90 10.59%
7/27/90 6.48%
7/31/90 7.01%
8/3/90 -2.45%
8/10/90 -4.32%
8/17/90 -7.07%
8/24/90 -8.96%
8/31/90 -10.66%
9/7/90 -17.71%
9/14/90 -16.93%
9/21/90 -22.36%
9/28/90 -26.28%
10/5/90 -18.37%
10/12/90 -25.65%
10/19/90 -21.77%
10/26/90 -20.32%
10/31/90 -24.87%
11/2/90 -21.78%
11/9/90 -25.39%
11/16/90 -14.60%
11/23/90 -17.26%
11/30/90 -9.99%
12/7/90 -13.89%
12/14/90 -12.46%
12/21/90 -14.13%
12/28/90 -11.63%
12/31/90 -11.12%
1/4/91 -12.27%
1/11/91 -9.89%
1/18/91 -10.36%
1/25/91 -18.46%
1/31/91 -14.38%
2/1/91 -11.27%
2/8/91 -13.32%
2/15/91 -10.99%
2/22/91 -14.46%
2/28/91 -18.42%
3/1/91 -18.57%
3/8/91 -14.17%
3/15/91 -10.32%
3/22/91 -10.98%
3/29/91 -13.14%
4/5/91 -18.89%
4/12/91 -14.31%
4/19/91 -11.19%
4/26/91 -11.91%
4/30/91 -19.81%
5/3/91 -16.01%
5/10/91 -17.57%
5/17/91 -12.76%
5/24/91 -5.79%
5/31/91 -0.90%
6/7/91 -6.84%
6/14/91 -15.57%
6/21/91 -15.83%
6/28/91 -18.44%
7/5/91 -19.75%
7/12/91 -13.91%
7/19/91 -13.83%
7/26/91 -16.61%
7/31/91 -15.54%
8/2/91 -16.44%
8/9/91 -17.23%
8/16/91 -18.83%
8/23/91 -15.69%
8/30/91 -5.59%
9/6/91 -14.86%
9/13/91 -16.11%
9/20/91 -16.19%
9/27/91 -17.21%
9/30/91 -17.03%
10/4/91 -22.12%
10/11/91 -17.72%
10/18/91 -9.36%
10/25/91 -15.56%
10/31/91 -11.06%
11/1/91 -10.99%
11/8/91 -14.84%
11/15/91 -18.79%
11/22/91 -18.79%
11/29/91 -20.83%
12/6/91 -19.81%
12/13/91 -21.71%
12/20/91 -19.80%
12/27/91 -21.24%
12/31/91 -19.56%
1/3/92 -14.22%
1/10/92 -12.54%
1/17/92 -13.24%
1/24/92 -8.49%
1/31/92 -16.96%
2/7/92 -15.59%
2/14/92 -10.61%
2/21/92 -4.85%
2/28/92 -4.19%
3/6/92 -10.37%
3/13/92 -10.17%
3/20/92 -11.62%
3/27/92 -12.89%
3/31/92 -12.87%
4/3/92 -16.07%
4/10/92 -15.15%
4/17/92 -9.68%
4/24/92 -9.27%
4/30/92 -9.14%
5/1/92 -9.01%
5/8/92 -10.74%
5/15/92 -4.20%
5/22/92 -2.65%
5/29/92 -6.78%
6/5/92 -6.46%
6/12/92 -2.49%
6/19/92 -9.96%
6/26/92 -13.59%
6/30/92 -13.00%
7/2/92 -6.75%
7/10/92 -8.71%
7/17/92 -5.76%
7/24/92 -6.86%
7/31/92 -1.61%
8/7/92 0.46%
8/14/92 0.89%
8/21/92 -5.12%
8/28/92 -5.44%
8/31/92 -3.58%
9/4/92 -3.93%
9/11/92 -9.34%
9/18/92 -5.98%
9/25/92 -14.48%
9/30/92 -16.31%
10/9/92 -12.42%
10/19/92 -12.60%
10/23/92 -11.76%
10/30/92 -8.33%
11/6/92 -3.93%
11/13/92 -6.42%
11/20/92 -4.23%
11/27/92 -6.44%
11/30/92 -6.31%
12/4/92 -9.81%
12/11/92 -7.73%
12/18/92 -8.32%
12/24/92 2.14%
12/31/92 6.91%
1/8/93 3.86%
1/15/93 0.55%
1/22/93 -2.00%
1/29/93 3.20%
2/5/93 5.06%
2/12/93 6.78%
2/19/93 1.63%
2/26/93 -0.81%
3/5/93 2.30%
3/12/93 10.52%
3/19/93 4.58%
3/26/93 3.71%
3/31/93 8.19%
4/2/93 7.95%
4/8/93 5.83%
4/16/93 6.30%
4/23/93 5.09%
4/30/93 4.30%
5/7/93 1.14%
5/14/93 -1.37%
5/21/93 -2.09%
5/28/93 -2.99%
6/4/93 0.15%
6/11/93 -5.51%
6/18/93 0.87%
6/25/93 1.78%
6/30/93 0.35%
7/2/93 -0.84%
7/9/93 -1.61%
7/16/93 -4.05%
7/23/93 -6.53%
7/30/93 -7.02%
8/6/93 -3.11%
8/13/93 -4.70%
8/20/93 -2.47%
8/27/93 -3.04%
8/31/93 -2.00%
9/3/93 -2.79%
9/10/93 -5.93%
9/17/93 -6.69%
9/24/93 -9.46%
9/30/93 -5.25%
10/1/93 -6.37%
10/8/93 -7.46%
10/15/93 -6.51%
10/22/93 -5.91%
10/29/93 -5.07%
11/5/93 -8.45%
11/12/93 -6.94%
11/19/93 -4.84%
11/26/93 -5.53%
11/30/93 -4.55%
12/3/93 -0.74%
12/10/93 -0.73%
12/17/93 -0.63%
12/24/93 7.63%
12/31/93 10.53%
1/7/94 2.81%
1/14/94 1.03%
1/21/94 7.80%
1/28/94 11.49%
1/31/94 10.03%
2/4/94 6.18%
2/11/94 3.97%
2/18/94 13.14%
2/25/94 7.03%
2/28/94 4.01%
3/3/94 5.47%
3/10/94 1.72%
3/17/94 2.96%
3/24/94 3.22%
3/31/94 4.73%
4/8/94 7.75%
4/15/94 3.77%
4/22/94 3.12%
4/29/94 4.43%
5/5/94 2.16%
5/13/94 0.79%
5/20/94 2.60%
5/27/94 0.39%
5/31/94 1.71%
6/3/94 -0.66%
6/10/94 -5.66%
6/17/94 -6.11%
6/24/94 -6.72%
6/30/94 -6.09%
7/1/94 -7.44%
7/8/94 -5.58%
7/15/94 -6.73%
7/22/94 -6.14%
7/29/94 -7.07%
8/5/94 -6.03%
8/12/94 -5.26%
8/19/94 -7.71%
8/25/94 -6.23%
8/31/94 -5.83%
9/2/94 -4.21%
9/9/94 -5.07%
9/16/94 -4.82%
9/23/94 -6.13%
9/30/94 -7.86%
10/7/94 -9.21%
10/14/94 -9.01%
10/21/94 -14.55%
10/28/94 -13.26%
10/31/94 -12.44%
11/3/94 -14.31%
11/11/94 -14.59%
11/18/94 -15.46%
11/25/94 -18.39%
11/30/94 -17.01%
12/2/94 -17.81%
12/9/94 -17.07%
12/16/94 -12.98%
12/23/94 -13.13%
12/30/94 -12.16%
1/6/95 -14.67%
1/13/95 -12.52%
1/20/95 -10.23%
1/27/95 -11.14%
1/31/95 -7.10%
2/3/95 -11.17%
2/10/95 -7.92%
2/17/95 -6.59%
2/24/95 -10.12%
2/28/95 -9.94%
3/3/95 -12.30%
3/10/95 -13.59%
3/17/95 -11.45%
3/24/95 -17.78%
3/31/95 -19.33%
4/7/95 -19.44%
4/14/95 -18.63%
4/21/95 -16.08%
4/28/95 -12.61%
5/5/95 -18.62%
5/12/95 -14.39%
5/19/95 -17.78%
5/26/95 -18.05%
5/31/95 -17.90%
6/2/95 -18.01%
6/9/95 -19.21%
6/16/95 -13.94%
6/23/95 -14.05%
6/30/95 -13.47%
7/7/95 -12.28%
7/14/95 -11.89%
7/21/95 -7.83%
7/28/95 -10.44%
7/31/95 -13.50%
8/4/95 -13.06%
8/11/95 -17.58%
8/18/95 -11.43%
8/25/95 -14.95%
8/31/95 -14.91%
9/8/95 -16.97%
9/15/95 -14.57%
9/22/95 -12.97%
9/29/95 -15.89%
10/6/95 -12.43%
10/13/95 -13.81%
10/20/95 -14.87%
10/27/95 -12.82%
10/31/95 -13.76%
11/3/95 -14.29%
11/10/95 -15.67%
11/17/95 -12.73%
11/24/95 -13.20%
11/30/95 -4.83%
12/1/95 -8.16%
12/8/95 -10.20%
12/15/95 -5.96%
12/22/95 -6.05%
12/29/95 -1.70%
1/5/96 -2.20%
1/12/96 -5.71%
1/19/96 -9.77%
1/26/96 -10.09%
1/31/96 -9.98%
2/1/96 -6.07%
2/8/96 -4.55%
2/15/96 -3.09%
2/23/96 -4.26%
2/29/96 -5.57%
3/1/96 -4.89%
3/8/96 -7.19%
3/15/96 -8.57%
3/22/96 -6.73%
3/31/96 -7.37%
4/5/96 -6.53%
4/12/96 -8.45%
4/19/96 -6.42%
4/26/96 -5.79%
4/30/96 -7.93%
5/3/96 -10.65%
5/10/96 -9.54%
5/17/96 -7.08%
5/24/96 -7.44%
5/31/96 -9.62%
6/7/96 -9.20%
6/14/96 -8.79%
6/21/96 -9.29%
6/30/96 -9.56%
7/5/96 -10.65%
7/12/96 -11.27%
7/19/96 -11.07%
7/26/96 -15.25%
7/31/96 -14.36%
8/2/96 -13.57%
8/9/96 -10.98%
8/16/96 -8.95%
8/23/96 -10.37%
8/31/96 -11.33%
9/6/96 -11.01%
9/13/96 -10.85%
9/20/96 -12.72%
9/27/96 -12.65%
9/30/96 -12.31%
10/4/96 -14.20%
10/11/96 -13.87%
10/18/96 -12.70%
10/25/96 -13.38%
10/31/96 -15.44%
11/1/96 -15.44%
11/8/96 -13.96%
11/15/96 -11.71%
11/22/96 -10.32%
11/30/96 -8.56%
12/6/96 -11.16%
12/13/96 -12.68%
12/20/96 -10.83%
12/27/96 -8.48%
12/31/96 -7.55%
1/3/97 -8.35%
1/10/97 -8.65%
1/17/97 -6.22%
1/24/97 -9.20%
1/31/97 -10.35%
2/7/97 -6.09%
2/14/97 -7.67%
2/21/97 -7.79%
2/28/97 -9.10%
3/7/97 -7.49%
3/14/97 -8.74%
3/21/97 -14.62%
3/27/97 -14.66%
3/31/97 -12.91%
4/4/97 -11.02%
4/11/97 -11.15%
4/18/97 -8.97%
4/25/97 -9.00%
4/30/97 -9.51%
5/2/97 -8.73%
5/9/97 -10.81%
5/16/97 -12.68%
5/23/97 -12.75%
5/30/97 -12.60%
6/6/97 -12.37%
6/13/97 -14.19%
6/20/97 -11.28%
6/27/97 -13.23%
6/30/97 -12.18%
7/3/97 -12.40%
7/11/97 -11.99%
7/18/97 -10.80%
7/25/97 -13.09%
7/31/97 -14.54%
8/1/97 -15.26%
8/8/97 -16.22%
8/15/97 -16.21%
8/22/97 -16.81%
8/29/97 -16.65%
9/5/97 -17.40%
9/12/97 -16.03%
9/19/97 -16.77%
9/26/97 -16.24%
9/30/97 -14.17%
10/3/97 -15.07%
10/10/97 -16.74%
10/17/97 -16.20%
10/24/97 -19.60%
10/31/97 -15.92%
11/7/97 -19.12%
11/14/97 -21.57%
11/21/97 -17.92%
11/28/97 -18.09%
12/5/97 -17.93%
12/12/97 -17.07%
12/19/97 -18.30%
12/26/97 -16.70%
12/31/97 -17.57%
1/2/98 -19.08%
1/9/98 -18.12%
1/16/98 -15.95%
1/23/98 -17.78%
1/30/98 -15.34%
2/6/98 -15.53%
2/13/98 -15.87%
2/20/98 -18.37%
2/27/98 -16.58%
3/6/98 -17.87%
3/13/98 -20.34%
3/20/98 -19.13%
3/27/98 -19.44%
3/31/98 -18.57%
4/3/98 -19.72%
4/10/98 -19.77%
4/17/98 -18.46%
4/24/98 -19.24%
4/30/98 -20.45%
5/1/98 -20.68%
5/8/98 -21.10%
5/15/98 -20.82%
5/22/98 -20.70%
5/29/98 -20.07%
6/5/98 -21.96%
6/12/98 -23.47%
6/19/98 -22.50%
6/26/98 -21.23%
6/30/98 -19.80%
7/3/98 -21.32%
7/10/98 -21.73%
7/17/98 -20.90%
7/24/98 -20.38%
7/31/98 -22.32%
8/7/98 -22.83%
8/14/98 -23.74%
8/21/98 -25.98%
8/28/98 -28.16%
8/31/98 -28.16%
9/4/98 -29.90%
9/11/98 -29.27%
9/18/98 -28.62%
9/25/98 -29.19%
9/30/98 -29.10%
10/2/98 -27.80%
10/9/98 -27.11%
10/16/98 -25.75%
10/23/98 -25.69%
10/30/98 -27.16%
11/6/98 -24.60%
11/13/98 -22.98%
11/20/98 -25.31%
11/27/98 -24.69%
11/30/98 -25.24%
12/4/98 -24.78%
12/11/98 -25.85%
12/18/98 -25.82%
12/31/98 -28.01%
1/8/99 -25.14%
1/15/99 -23.75%
1/22/99 -22.15%
1/29/99 -23.64%
2/5/99 -23.17%
2/12/99 -25.18%
2/19/99 -24.59%
2/26/99 -25.91%
3/5/99 -24.40%
3/12/99 -26.08%
3/19/99 -25.17%
3/26/99 -25.00%
3/31/99 -25.09%
</TABLE>
<TABLE>
<CAPTION>
PERFORMANCE RECORD: (US$)
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NAV(1) 9.64 27.28 88.98 16.16 40.83 33.47 4.23 -11.10 16.10 -23.75
Market Price(2) 14.17 7.07 71.05 53.80 38.82 6.05 16.66 -16.43 3.56 -33.41
MSCI Chile(3) 35.33 20.19 116.11 21.90 36.08 44.74 -2.66 -13.53 5.52 -22.83
<CAPTION>
DIVIDEND DISTRIBUTION:
(PER SHARE US$) 0.34 1.25 3.16 3.22 1.45 1.06 0.87 0.89 3.40 0.70
</TABLE>
*Source: Lipper Analytical Services
(1)- Total return based on NAV and assuming the reinvestment of dividends and
distributions
(2)- Total return based on Market Price and assuming the reinvestment of
dividends and distributions
(3)- Morgan Stanley Capital Chile Index
1
<PAGE>
- --------------------------------------------------------------------------------
THE CHILE FUND, INC.
COMPARATIVE PERFORMANCE REPORT*
<TABLE>
<CAPTION>
FOURTH
INCEPTION YEAR YEAR YEAR QUARTER
DATE ENDED 1996 ENDED 1997 ENDED 1998 1998
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
THE CHILE FUND, INC. 9/27/89 -11.14% 16.69% -23.28% 14.45%
FIVE ARROWS CHILE INV. (a) 2/23/90 -13.36% 0.10% -25.79% 13.65%
GENESIS CHILE FUND(a) 11/2/89 -14.40% 13.77% -29.76% 8.95%
MSCI CHILE INDEX -13.53% 5.52% -28.50% 13.31%
</TABLE>
Good relative performance in 1998:
- - Consistent outperformance against competitors
- - Value added through private equity (Arica)
- - Sector selection positive in electric utilities and energy sources
- - Failed to reduce exposure to consumer related sectors
Source: Lipper Analytical Services
(a) This Fund is not registered under the Investment Company Act of 1940
2
<PAGE>
- --------------------------------------------------------------------------------
THE CHILE FUND, INC.
CURRENT STRUCTURE AS OF 2/28/99
[CHART]
In the printed version of the document, a pie chart appears which depicts
the following percentages:
<TABLE>
<CAPTION>
Allocation
Industry (% of Total Portfolio+)
<S> <C>
Infrastructure 2.47%
Forestry 10.85%
Real Estate 2.17%
Other* 4.3%
Financial Services 4.91%
Electric Gen. 14.19%
Steel 1.77%
Telecom 18.67%
Mining 2.11%
Consumer Durables 1.71%
Electric Dist 15.37%
S-T Invest. 2.37%
Food & Beverage 15.59%
Fertilizer 3.52%
</TABLE>
**Other Includes: Construction & Engineering, Fishery, Health Care, Insurance,
Retail and Textile
A list of portfolio holdings for the preceding 12 months is available upon
request.
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
Name of Issuer % of Total Portfolio+
<S> <C>
Compania de Telecomunicaciones de Chile S.A. 18.6%
Chilectra S.A. 11.8%
Empresa Nacional de Electricidad S.A. 8.1%
Compania de Petreoleos de Chile S.A. 6.5%
Enersis S.A. 6.1%
Cia. Cervecerias Unidas S.A. 4.8%
Embotelladora Andina S.A. 3.9%
Empresas CMPC S.A. 3.8%
Empresas Emel S.A. 3.5%
Embotelladora Arica 3.5%
</TABLE>
+: Excluding cash.
3
<PAGE>
- --------------------------------------------------------------------------------
THE CHILE FUND, INC.
ELECTRICAL UTILITIES
ENERSIS
(ENI)
[CHART]
In the printed version of the document, a pie chart appears which depicts
the following percentages:
<TABLE>
<CAPTION>
Ownership Structure
<S> <C>
AFP'S 29%
ENDESA-SPAIN (ELE) 32%
ADR & CHILEAN
MINORITY SHARES 39%
</TABLE>
ENDESA CHILE
(EOC)
[CHART]
In the printed version of the document, a pie chart appears which depicts
the following percentages:
<TABLE>
<CAPTION>
Ownership Structure
<S> <C>
AFPS 28%
ADR & CHILEAN
MINORITY SHARES 47%
ENERSIS (ENI) AFPS 25%
</TABLE>
OTHER COMPANIES INDIRECTLY AFFECTED
Chilectra Chile 75% owned by ENI
Cerj Brazil 37% owned by ENI
Edelnor Peru 29% owned by ENI
Central Costanera Argentina 52% owned by EOC
Edegel Peru 30% owned by EOC
Cachoeira Dourada Brazil 68% owned by EOC
OUR STRATEGY
- - The current takeover strategy of both companies is not our best
scenario. EOC and ENI would become "private" companies, similar
to most other assets in Latin America.
THE NEGATIVES
- - Decreased liquidity - Increased volatility
- - Financial and growth incentives not aligned with strategic shareholder
- - No corporate governance
- - Acquisition option expires
BETTER/ALTERNATIVE OPTIONS
- - A tender offer at an attractive price (e.g. $33.5 for ENI) for 100% of
ENI, EOC and Chilectra.
- - The creation of:
- a Latin American investment vehicle
- a larger and more liquid vehicle
- a publicly owned company with a diversified shareholder base
(e.g. pension funds in Chile, Argentina, Peru, and Brazil) and
management accountability
- and, financial & growth incentives well aligned among all
shareholders
The information provided in this report should not be considered a
recommendation to purchase or sell any particular security. There is
no assurance that any security discussed herein will remain in an
account's portfolio at the time you receive this report or that
securities sold have not been repurchased. The securities discussed do not
represent an account's entire portfolio and in the aggregate may represent
only a small percentage of an account's portfolio holdings. It should not be
assumed that any of the securities transactions or holdings discussed were
or will prove to be profitable, or that the investment recommendations or
decisions we make in the future will be profitable or will equal the
investment performance of the securities discussed herein.
4
<PAGE>
- --------------------------------------------------------------------------------
THE CHILE FUND, INC.
MANAGEMENT STYLE
- - The central goal is to offer a fund that invests in Chile with a relatively
low tracking error
- Blue Chips tend to dominate the portfolio
- Sector rotation is relatively limited
- Turnover is low
- - The portfolio is structured to be fully invested normally
- Cash levels are normally low
- The number of investments has been significantly reduced
- - The Fund has never made full use of small caps or private equity
- In part, private equity opportunities have been limited mainly due to a
surfeit of local liquidity
- The stock market has never fully developed for small cap companies
5
<PAGE>
- --------------------------------------------------------------------------------
THE CHILE FUND, INC.
CHILE ECONOMIC OUTLOOK
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
3Q98 4Q98 1998 1Q99 2Q99 3Q99 4Q99 1999 2000
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GDP Growth 2.7% -2.5% 3.4% -1.0% -0.5% 1.7% 4.0% 1.0% 5.0%
Aggregate Demand Growth 0.5% -11.0% 2.3% -6.0% -3.0% 2.0% 6.0% -0.4% 6.0%
Trade Balance US$m (1,072) (323) (2,607) 200 (300) (900) (1,000) (2,000) (2,000)
Current Account Deficit 6.2% 5.0% 4.9%
Inflation (y/e) 4.7% 4.0% 3.5%
Central Bank Rate (real) 14.00% 6.75% 6.50% 6.00% 6.00% 6.00% 6.00%
Long Term Rate (real) 8.9% 7.2% 7.2% 6.6% 6.4% 6.2% 6.2% 6.2% 6.5%
Exchange Rate (ChP/US$) 471 472 472 485 495 510 525 525 545
Increase in Fiscal Spending 6.5% 3.0% 5.0%
Fiscal Balance 0.8% 0.5% 0.8%
Average Copper Price (cents/lb) 75 65 75
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Source: Celfin
6
<PAGE>
- --------------------------------------------------------------------------------
THE CHILE FUND, INC.
COPPER PRICE & INVENTORIES LME 1990-1999
COPPER PRICE
[GRAPH]
In the printed version of the document, a line graph appears which depicts
the following plot points:
<TABLE>
<CAPTION>
Inventories LME
(Metric To)
Date Cu LME, spot (US$/pound) Date US$million 12mm
<S> <C> <C> <C> <C>
5-Jan-90 108,975 1.123 1/15/81 -496.1
12-Jan-90 106,200 1.109 2/15/81 -679.9
19-Jan-90 104,375 1.039 3/15/81 -760.1
26-Jan-90 104,150 0.997 4/15/81 -990.8
2-Feb-90 99,950 1.014 5/15/81 -1062.4
9-Feb-90 93,725 1.036 6/15/81 -1267.3
16-Feb-90 88,300 1.075 7/15/81 -1500.5
23-Feb-90 88,300 1.091 8/15/81 -1522.6
2-Mar-90 78,875 1.097 9/15/81 -1622.2
9-Mar-90 76,525 1.156 10/15/81 -1669.1
16-Mar-90 75,000 1.185 11/15/81 -1739.8
23-Mar-90 72,075 1.143 12/15/81 -1651.9
30-Mar-90 59,125 1.16 1/15/82 -1547.6
6-Apr-90 55,225 1.159 2/15/82 -1413.8
13-Apr-90 54,575 1.166 3/15/82 -1231.2
20-Apr-90 66,900 1.114 4/15/82 -1017.8
27-Apr-90 62,675 1.127 5/15/82 -999.6
4-May-90 61,200 1.139 6/15/82 -772.9
11-May-90 61,350 1.151 7/15/82 -453.8
18-May-90 78,675 1.137 8/15/82 -169
25-May-90 77,100 1.143 9/15/82 71.7
1-Jun-90 76,425 1.114 10/15/82 287.5
8-Jun-90 73,050 1.125 11/15/82 486
15-Jun-90 66,325 1.113 12/15/82 700.3
22-Jun-90 60,725 1.123 1/15/83 791.6
29-Jun-90 59,400 1.152 2/15/83 865.7
6-Jul-90 53,550 1.182 3/15/83 885
13-Jul-90 46,850 1.231 4/15/83 927.5
20-Jul-90 61,525 1.184 5/15/83 1156.8
27-Jul-90 84,975 1.259 6/15/83 1312.5
3-Aug-90 104,350 1.269 7/15/83 1329.2
10-Aug-90 115,600 1.308 8/15/83 1392.7
17-Aug-90 129,750 1.31 9/15/83 1402.6
24-Aug-90 131,025 1.301 10/15/83 1402.9
31-Aug-90 133,075 1.296 11/15/83 1440.3
7-Sep-90 133,175 1.3 12/15/83 1377.2
14-Sep-90 150,675 1.321 1/15/84 1368.6
21-Sep-90 174,800 1.237 2/15/84 1360.7
28-Sep-90 187,575 1.235 3/15/84 1346.2
5-Oct-90 186,200 1.235 4/15/84 1376.4
12-Oct-90 193,375 1.183 5/15/84 1300
19-Oct-90 197,500 1.17 6/15/84 1221.8
26-Oct-90 184,025 1.207 7/15/84 1165.5
2-Nov-90 181,975 1.154 8/15/84 1001.5
9-Nov-90 179,675 1.161 9/15/84 925.9
16-Nov-90 177,650 1.18 10/15/84 814
23-Nov-90 178,250 1.155 11/15/84 792.3
30-Nov-90 168,400 1.129 12/15/84 808.5
7-Dec-90 163,300 1.141 1/15/85 790.2
14-Dec-90 165,075 1.12 2/15/85 749.2
21-Dec-90 173,275 1.113 3/15/85 743.1
28-Dec-90 178,650 1.15 4/15/85 720.8
4-Jan-91 181,500 1.161 5/15/85 779
11-Jan-91 178,475 1.15 6/15/85 740.6
18-Jan-91 186,525 1.103 7/15/85 816.9
25-Jan-91 187,075 1.056 8/15/85 896.2
1-Feb-91 188,925 1.078 9/15/85 929.6
8-Feb-91 190,800 1.081 10/15/85 1089.5
15-Feb-91 193,600 1.087 11/15/85 1087.2
22-Feb-91 195,450 1.097 12/15/85 1080.3
1-Mar-91 202,775 1.106 1/15/86 1090.5
8-Mar-91 209,150 1.097 2/15/86 1132
15-Mar-91 207,050 1.063 3/15/86 1167.6
22-Mar-91 207,950 1.077 4/15/86 1241.9
29-Mar-91 213,925 1.077 5/15/86 1253.8
5-Apr-91 186,900 1.079 6/15/86 1315.3
12-Apr-91 218,775 1.08 7/15/86 1299.6
19-Apr-91 226,600 1.088 8/15/86 1340.8
26-Apr-91 230,175 1.092 9/15/86 1334
3-May-91 237,875 1.043 10/15/86 1320.5
10-May-91 261,775 1.04 11/15/86 1286.8
17-May-91 285,925 0.971 12/15/86 1308.2
24-May-91 286,350 1 1/15/87 1255.5
31-May-91 279,800 0.963 2/15/87 1299.7
7-Jun-91 273,100 0.986 3/15/87 1214.8
14-Jun-91 269,275 0.996 4/15/87 1183.3
21-Jun-91 259,900 1.014 5/15/87 1131
28-Jun-91 263,350 1.008 6/15/87 1113.2
5-Jul-91 265,000 1.034 7/15/87 1151.5
12-Jul-91 262,575 1.013 8/15/87 1109.8
19-Jul-91 255,350 1.01 9/15/87 1109.9
26-Jul-91 259,775 1.012 10/15/87 1104.3
2-Aug-91 266,500 1.032 11/15/87 1142.1
9-Aug-91 280,100 1.02 12/15/87 1306.4
16-Aug-91 288,575 1.001 1/15/88 1532.1
23-Aug-91 296,000 0.995 2/15/88 1618.3
30-Aug-91 303,250 1.018 3/15/88 1726.9
6-Sep-91 310,000 1.041 4/15/88 1853.7
13-Sep-91 312,475 1.047 5/15/88 1941.7
20-Sep-91 312,075 1.035 6/15/88 2018.2
27-Sep-91 309,300 1.051 7/15/88 2048.6
4-Oct-91 304,825 1.048 8/15/88 2035.5
11-Oct-91 300,925 1.044 9/15/88 2146.4
18-Oct-91 300,125 1.055 10/15/88 2088.2
25-Oct-91 294,050 1.047 11/15/88 2293.5
1-Nov-91 291,625 1.063 12/15/88 2314.9
8-Nov-91 293,200 1.059 1/15/89 2275.3
15-Nov-91 292,650 1.052 2/15/89 2274
22-Nov-91 297,025 1.039 3/15/89 2315.3
29-Nov-91 302,325 1.031 4/15/89 2275.2
6-Dec-91 314,600 1.017 5/15/89 2343.4
13-Dec-91 314,450 0.99 6/15/89 2190.6
20-Dec-91 316,875 1.01 7/15/89 2002.2
27-Dec-91 325,500 0.991 8/15/89 2008
3-Jan-92 332,325 0.965 9/15/89 1945.8
10-Jan-92 332,425 0.959 10/15/89 2071
17-Jan-92 327,850 0.993 11/15/89 1914.7
24-Jan-92 315,675 0.993 12/15/89 1543.1
31-Jan-92 305,575 1.008 1/15/90 1454.8
7-Feb-92 310,225 0.999 2/15/90 1332.3
14-Feb-92 305,950 1.005 3/15/90 1221.6
21-Feb-92 308,550 1.008 4/15/90 1267.5
28-Feb-92 302,725 1.028 5/15/90 1294.8
6-Mar-92 302,325 1.01 6/15/90 1418.8
13-Mar-92 301,975 1.011 7/15/90 1538.7
20-Mar-92 303,300 1.007 8/15/90 1531.6
27-Mar-92 300,775 1.015 9/15/90 1537.5
3-Apr-92 296,400 1.026 10/15/90 1397.3
10-Apr-92 292,050 1.008 11/15/90 1307.9
17-Apr-92 287,300 1.001 12/15/90 1410.7
24-Apr-92 282,925 1.007 1/15/91 1368.9
1-May-92 279,650 1.007 2/15/91 1425
8-May-92 275,350 1.008 3/15/91 1538.7
15-May-92 271,750 1.014 4/15/91 1605.4
22-May-92 265,725 1.013 5/15/91 1524.3
29-May-92 264,750 1.015 6/15/91 1586.7
5-Jun-92 264,500 1.034 7/15/91 1572.3
12-Jun-92 263,350 1.026 8/15/91 1599.1
19-Jun-92 263,750 1.046 9/15/91 1609.5
26-Jun-92 261,200 1.085 10/15/91 1588.8
3-Jul-92 259,125 1.113 11/15/91 1529.5
10-Jul-92 262,400 1.123 12/15/91 1575.9
17-Jul-92 257,975 1.166 1/15/92 1531.8
24-Jul-92 255,975 1.145 2/15/92 1465.9
31-Jul-92 251,350 1.151 3/15/92 1537.5
7-Aug-92 248,500 1.144 4/15/92 1349.3
14-Aug-92 251,350 1.12 5/15/92 1352.7
21-Aug-92 262,325 1.164 6/15/92 1200.5
28-Aug-92 268,550 1.137 7/15/92 1155.7
4-Sep-92 275,275 1.147 8/15/92 1115.7
11-Sep-92 278,800 1.077 9/15/92 956.3
18-Sep-92 285,075 1.092 10/15/92 942
25-Sep-92 288,225 1.099 11/15/92 779.1
2-Oct-92 296,750 1.036 12/15/92 749.3
9-Oct-92 300,125 1.042 1/15/93 539
16-Oct-92 302,450 1.014 2/15/93 384
23-Oct-92 307,150 1.018 3/15/93 223.4
30-Oct-92 314,400 1.032 4/15/93 119.1
6-Nov-92 320,475 0.997 5/15/93 -169.9
13-Nov-92 321,100 0.979 6/15/93 -279.2
20-Nov-92 324,100 0.973 7/15/93 -470.8
27-Nov-92 327,000 0.995 8/15/93 -570.6
4-Dec-92 327,375 0.99 9/15/93 -656.9
11-Dec-92 332,850 1 10/15/93 -803.5
18-Dec-92 337,325 1.005 11/15/93 -778.6
25-Dec-92 342,400 1.023 12/15/93 -978.6
8-Jan-93 314,900 1.084 1/15/94 -817
15-Jan-93 308,900 0.998 2/15/94 -631.2
22-Jan-93 314,850 1.012 3/15/94 -664.3
29-Jan-93 311,325 1.003 4/15/94 -638.7
5-Feb-93 315,475 1.015 5/15/94 -492.5
12-Feb-93 318,875 1.004 6/15/94 -498.4
19-Feb-93 319,425 1.019 7/15/94 -327
26-Feb-93 328,125 0.979 8/15/94 -266.4
5-Mar-93 334,775 0.966 9/15/94 -150.6
12-Mar-93 339,400 1.001 10/15/94 -9.8
19-Mar-93 347,350 0.996 11/15/94 280.6
26-Mar-93 354,700 0.981 12/15/94 725.1
2-Apr-93 362,125 0.974 1/15/95 969.9
9-Apr-93 367,250 0.927 2/15/95 1045.9
16-Apr-93 369,600 0.847 3/15/95 1435.6
23-Apr-93 382,100 0.861 4/15/95 1637.9
30-Apr-93 392,375 0.852 5/15/95 1863.2
7-May-93 400,300 0.793 6/15/95 1883.5
14-May-93 407,125 0.839 7/15/95 1873
21-May-93 413,675 0.83 8/15/95 1795.7
28-May-93 420,400 0.814 9/15/95 1776.3
4-Jun-93 424,800 0.868 10/15/95 1641.6
11-Jun-93 436,300 0.832 11/15/95 1585.2
18-Jun-93 449,375 0.836 12/15/95 1369.2
25-Jun-93 455,375 0.858 1/15/96 1027.5
2-Jul-93 447,075 0.876 2/15/96 909.4
9-Jul-93 454,500 0.901 3/15/96 645.8
16-Jul-93 456,825 0.867 4/15/96 556.5
23-Jul-93 462,975 0.865 5/15/96 387.5
30-Jul-93 463,250 0.892 6/15/96 465.1
6-Aug-93 470,600 0.884 7/15/96 338.2
13-Aug-93 479,925 0.863 8/15/96 101.8
20-Aug-93 497,450 0.865 9/15/96 -81.9
27-Aug-93 517,250 0.874 10/15/96 -480.7
3-Sep-93 524,500 0.886 11/15/96 -816.6
10-Sep-93 526,150 0.86 12/15/96 -1095
17-Sep-93 547,875 0.796 1/15/97 -768
24-Sep-93 567,875 0.801 2/15/97 -395.3
1-Oct-93 601,725 0.769 3/15/97 -695.5
8-Oct-93 594,550 0.77 4/15/97 -1000.8
15-Oct-93 601,250 0.77 5/15/97 -1072.5
22-Oct-93 606,050 0.743 6/15/97 -1161.1
29-Oct-93 613,600 0.742 7/15/97 -1333.7
5-Nov-93 606,675 0.754 8/15/97 -1083.5
12-Nov-93 592,800 0.756 9/15/97 -1257
19-Nov-93 585,825 0.745 10/15/97 -1388.4
26-Nov-93 585,975 0.752 11/15/97 -1581.9
3-Dec-93 592,425 0.763 12/15/97 -1876.6
10-Dec-93 589,950 0.778 1/15/98 -2534.7
17-Dec-93 586,700 0.79 2/15/98 -3116.4
24-Dec-93 589,225 0.817 3/15/98 -3074.8
31-Dec-93 599,500 0.811 4/15/98 -3092.2
14-Jan-94 617,800 0.83 5/15/98 -3355.9
21-Jan-94 607,575 0.849 6/15/98 -3510
28-Jan-94 600,775 0.851 7/15/98 -3704.9
4-Feb-94 594,950 0.865 8/15/98 -4009.8
11-Feb-94 583,400 0.835 9/15/98 -3889.1
18-Feb-94 564,850 0.864 10/15/98 -3492.7
25-Feb-94 558,950 0.864 11/15/98 -3190.7
4-Mar-94 546,875 0.864 12/15/98 -2607.8
11-Mar-94 537,475 0.869 1/15/99
18-Mar-94 520,625 0.889 2/15/99
25-Mar-94 514,975 0.881
1-Apr-94 504,350 0.862
8-Apr-94 497,825 0.86
15-Apr-94 495,475 0.854
22-Apr-94 480,975 0.869
29-Apr-94 473,450 0.882
6-May-94 456,425 0.915
13-May-94 424,700 0.981
20-May-94 399,725 1.004
27-May-94 387,000 1.009
3-Jun-94 382,750 1.016
10-Jun-94 371,200 1.087
17-Jun-94 360,850 1.113
24-Jun-94 356,900 1.116
1-Jul-94 353,925 1.09
8-Jul-94 347,800 1.108
15-Jul-94 342,125 1.13
22-Jul-94 339,600 1.143
29-Jul-94 338,650 1.108
5-Aug-94 340,550 1.09
12-Aug-94 346,475 1.1
19-Aug-94 353,575 1.094
26-Aug-94 360,450 1.096
2-Sep-94 367,350 1.133
9-Sep-94 369,400 1.134
16-Sep-94 368,825 1.127
23-Sep-94 366,300 1.16
30-Sep-94 360,800 1.134
7-Oct-94 347,375 1.149
14-Oct-94 337,100 1.126
21-Oct-94 338,400 1.166
28-Oct-94 335,075 1.201
4-Nov-94 332,225 1.216
11-Nov-94 319,200 1.219
18-Nov-94 323,225 1.284
25-Nov-94 320,075 1.282
2-Dec-94 318,275 1.33
9-Dec-94 304,275 1.342
16-Dec-94 299,875 1.362
23-Dec-94 297,325 1.347
30-Dec-94 301,850 1.374
6-Jan-95 313,175 1.355
13-Jan-95 313,025 1.373
20-Jan-95 312,575 1.389
27-Jan-95 310,125 1.358
3-Feb-95 307,450 1.299
10-Feb-95 301,525 1.304
17-Feb-95 290,525 1.305
24-Feb-95 283,600 1.295
3-Mar-95 273,700 1.309
10-Mar-95 266,050 1.315
17-Mar-95 256,225 1.31
24-Mar-95 249,300 1.332
31-Mar-95 239,900 1.326
7-Apr-95 226,825 1.33
14-Apr-95 222,375 1.312
21-Apr-95 208,775 1.291
28-Apr-95 204,750 1.261
5-May-95 211,800 1.231
12-May-95 211,275 1.249
19-May-95 198,500 1.243
26-May-95 197,950 1.282
2-Jun-95 206,325 1.301
9-Jun-95 210,550 1.306
16-Jun-95 204,000 1.348
23-Jun-95 178,500 1.364
30-Jun-95 166,425 1.343
7-Jul-95 146,125 1.342
14-Jul-95 141,450 1.363
21-Jul-95 154,250 1.289
28-Jul-95 154,075 1.312
4-Aug-95 150,550 1.348
11-Aug-95 157,325 1.34
18-Aug-95 163,650 1.379
25-Aug-95 162,750 1.365
1-Sep-95 173,500 1.313
8-Sep-95 173,125 1.318
15-Sep-95 174,300 1.281
22-Sep-95 178,300 1.317
29-Sep-95 178,100 1.31
6-Oct-95 175,550 1.273
13-Oct-95 176,350 1.258
20-Oct-95 181,550 1.218
27-Oct-95 190,950 1.222
3-Nov-95 201,575 1.275
10-Nov-95 207,325 1.281
17-Nov-95 211,450 1.247
24-Nov-95 216,650 1.251
1-Dec-95 221,875 1.235
8-Dec-95 230,125 1.213
15-Dec-95 251,150 1.227
22-Dec-95 278,700 1.224
29-Dec-95 296,425 1.205
5-Jan-96 315,175 1.156
12-Jan-96 330,675 1.134
19-Jan-96 342,450 1.125
26-Jan-96 354,175 1.118
2-Feb-96 353,700 1.147
9-Feb-96 345,275 1.152
16-Feb-96 356,800 1.119
23-Feb-96 353,050 1.138
1-Mar-96 347,975 1.144
8-Mar-96 343,525 1.173
15-Mar-96 339,575 1.153
22-Mar-96 339,250 1.142
29-Mar-96 322,025 1.149
5-Apr-96 319,375 1.123
12-Apr-96 305,100 1.161
19-Apr-96 302,725 1.182
26-Apr-96 300,975 1.183
3-May-96 306,975 1.193
10-May-96 318,200 1.214
17-May-96 310,800 1.142
24-May-96 313,550 1.097
31-May-96 309,450 1.11
7-Jun-96 308,325 1.002
14-Jun-96 284,800 0.898
21-Jun-96 272,775 0.857
28-Jun-96 262,625 0.881
5-Jul-96 241,600 0.87
12-Jul-96 232,875 0.848
19-Jul-96 228,725 0.853
26-Jul-96 226,775 0.903
2-Aug-96 234,850 0.879
9-Aug-96 246,675 0.88
16-Aug-96 261,000 0.874
23-Aug-96 271,675 0.884
30-Aug-96 275,275 0.925
6-Sep-96 273,675 0.877
13-Sep-96 269,825 0.848
20-Sep-96 265,450 0.862
27-Sep-96 247,325 0.888
4-Oct-96 229,575 0.867
11-Oct-96 202,500 0.888
18-Oct-96 172,425 0.88
25-Oct-96 145,825 0.92
1-Nov-96 123,700 0.888
8-Nov-96 113,400 0.91
15-Nov-96 101,175 0.974
22-Nov-96 93,900 1.002
29-Nov-96 92,475 1.017
6-Dec-96 99,875 0.97
13-Dec-96 112,500 0.967
20-Dec-96 117,450 0.975
27-Dec-96 121,400 0.965
3-Jan-97 123,225 0.995
10-Jan-97 131,275 1.023
17-Jan-97 138,500 1.02
24-Jan-97 156,000 1.017
31-Jan-97 191,750 0.992
7-Feb-97 215,825 1.016
14-Feb-97 221,725 1.024
21-Feb-97 222,500 1.073
28-Feb-97 216,575 1.079
7-Mar-97 208,575 1.084
14-Mar-97 201,250 1.069
21-Mar-97 187,775 1.074
28-Mar-97 183,475 1.076
4-Apr-97 174,475 1.06
11-Apr-97 159,675 1.029
18-Apr-97 152,475 1.038
25-Apr-97 145,200 1.081
2-May-97 147,925 1.07
9-May-97 153,350 1.084
16-May-97 143,675 1.119
23-May-97 137,675 1.143
30-May-97 133,225 1.147
6-Jun-97 132,625 1.128
13-Jun-97 125,650 1.175
20-Jun-97 121,550 1.164
27-Jun-97 124,900 1.097
4-Jul-97 129,850 1.091
11-Jul-97 139,125 1.036
18-Jul-97 181,150 1.051
25-Jul-97 210,225 1.077
1-Aug-97 234,950 1.048
8-Aug-97 248,700 1.038
15-Aug-97 260,875 1.004
22-Aug-97 272,575 0.991
29-Aug-97 275,150 0.996
5-Sep-97 284,850 0.984
12-Sep-97 288,775 0.952
19-Sep-97 301,950 0.965
26-Sep-97 322,450 0.953
3-Oct-97 335,175 0.943
10-Oct-97 341,475 0.95
17-Oct-97 338,625 0.957
24-Oct-97 335,225 0.919
31-Oct-97 341,225 0.914
7-Nov-97 345,850 0.895
14-Nov-97 343,025 0.889
21-Nov-97 344,275 0.849
28-Nov-97 339,600 0.851
5-Dec-97 345,650 0.819
12-Dec-97 337,550 0.823
19-Dec-97 329,175 0.806
26-Dec-97 331,525 0.796
2-Jan-98 335,025 0.792
9-Jan-98 341,850 0.757
16-Jan-98 340,550 0.779
23-Jan-98 343,500 0.793
30-Jan-98 361,525 0.799
6-Feb-98 372,975 0.776
13-Feb-98 368,025 0.769
20-Feb-98 375,550 0.757
27-Feb-98 378,075 0.774
6-Mar-98 370,525 0.806
13-Mar-98 358,150 0.825
20-Mar-98 353,450 0.799
27-Mar-98 347,000 0.796
3-Apr-98 338,750 0.771
10-Apr-98 326,775 0.805
17-Apr-98 304,975 0.841
24-Apr-98 277,350 0.849
1-May-98 262,200 0.84
8-May-98 274,900 0.805
15-May-98 275,650 0.79
22-May-98 268,675 0.77
29-May-98 263,575 0.775
5-Jun-98 261,325 0.768
12-Jun-98 256,900 0.764
19-Jun-98 252,225 0.766
26-Jun-98 248,925 0.743
3-Jul-98 249,150 0.733
10-Jul-98 247,125 0.727
17-Jul-98 249,100 0.771
24-Jul-98 256,400 0.804
31-Jul-98 260,150 0.77
7-Aug-98 263,850 0.749
14-Aug-98 270,000 0.738
21-Aug-98 285,500 0.74
28-Aug-98 303,200 0.733
4-Sep-98 337,300 0.757
11-Sep-98 362,725 0.767
18-Sep-98 379,600 0.755
25-Sep-98 401,375 0.755
2-Oct-98 414,575 0.733
9-Oct-98 425,025 0.73
16-Oct-98 432,175 0.747
23-Oct-98 441,450 0.731
30-Oct-98 457,675 0.733
6-Nov-98 464,200 0.741
13-Nov-98 478,400 0.72
20-Nov-98 484,425 0.733
27-Nov-98 504,025 0.721
4-Dec-98 531,675 0.693
11-Dec-98 543,925 0.67
18-Dec-98 558,150 0.668
25-Dec-98 576,825 0.665
1-Jan-99 589,925 0.677
8-Jan-99 601,075 0.665
15-Jan-99 604,225 0.67
22-Jan-99 615,875 0.664
29-Jan-99 643,900 0.649
4-Feb-99 663,000 0.666
</TABLE>
CHILEAN TRADE DEFICIT
[GRAPH]
In the printed version of the document, a vertical and linear graph
appears which depicts the following plot points:
<TABLE>
<CAPTION>
12 Months
Period Ending: US $ Millions
<S> <C>
1/15/81 -496.1
2/15/81 -679.9
3/15/81 -760.1
4/15/81 -990.8
5/15/81 -1062.4
6/15/81 -1267.3
7/15/81 -1500.5
8/15/81 -1522.6
9/15/81 -1622.2
10/15/81 -1669.1
11/15/81 -1739.8
12/15/81 -1651.9
1/15/82 -1547.6
2/15/82 -1413.8
3/15/82 -1231.2
4/15/82 -1017.8
5/15/82 -999.6
6/15/82 -772.9
7/15/82 -453.8
8/15/82 -169
9/15/82 71.7
10/15/82 287.5
11/15/82 486
12/15/82 700.3
1/15/83 791.6
2/15/83 865.7
3/15/83 885
4/15/83 927.5
5/15/83 1156.8
6/15/83 1312.5
7/15/83 1329.2
8/15/83 1392.7
9/15/83 1402.6
10/15/83 1402.9
11/15/83 1440.3
12/15/83 1377.2
1/15/84 1368.6
2/15/84 1360.7
3/15/84 1346.2
4/15/84 1376.4
5/15/84 1300
6/15/84 1221.8
7/15/84 1165.5
8/15/84 1001.5
9/15/84 925.9
10/15/84 814
11/15/84 792.3
12/15/84 808.5
1/15/85 790.2
2/15/85 749.2
3/15/85 743.1
4/15/85 720.8
5/15/85 779
6/15/85 740.6
7/15/85 816.9
8/15/85 896.2
9/15/85 929.6
10/15/85 1089.5
11/15/85 1087.2
12/15/85 1080.3
1/15/86 1090.5
2/15/86 1132
3/15/86 1167.6
4/15/86 1241.9
5/15/86 1253.8
6/15/86 1315.3
7/15/86 1299.6
8/15/86 1340.8
9/15/86 1334
10/15/86 1320.5
11/15/86 1286.8
12/15/86 1308.2
1/15/87 1255.5
2/15/87 1299.7
3/15/87 1214.8
4/15/87 1183.3
5/15/87 1131
6/15/87 1113.2
7/15/87 1151.5
8/15/87 1109.8
9/15/87 1109.9
10/15/87 1104.3
11/15/87 1142.1
12/15/87 1306.4
1/15/88 1532.1
2/15/88 1618.3
3/15/88 1726.9
4/15/88 1853.7
5/15/88 1941.7
6/15/88 2018.2
7/15/88 2048.6
8/15/88 2035.5
9/15/88 2146.4
10/15/88 2088.2
11/15/88 2293.5
12/15/88 2314.9
1/15/89 2275.3
2/15/89 2274
3/15/89 2315.3
4/15/89 2275.2
5/15/89 2343.4
6/15/89 2190.6
7/15/89 2002.2
8/15/89 2008
9/15/89 1945.8
10/15/89 2071
11/15/89 1914.7
12/15/89 1543.1
1/15/90 1454.8
2/15/90 1332.3
3/15/90 1221.6
4/15/90 1267.5
5/15/90 1294.8
6/15/90 1418.8
7/15/90 1538.7
8/15/90 1531.6
9/15/90 1537.5
10/15/90 1397.3
11/15/90 1307.9
12/15/90 1410.7
1/15/91 1368.9
2/15/91 1425
3/15/91 1538.7
4/15/91 1605.4
5/15/91 1524.3
6/15/91 1586.7
7/15/91 1572.3
8/15/91 1599.1
9/15/91 1609.5
10/15/91 1588.8
11/15/91 1529.5
12/15/91 1575.9
1/15/92 1531.8
2/15/92 1465.9
3/15/92 1537.5
4/15/92 1349.3
5/15/92 1352.7
6/15/92 1200.5
7/15/92 1155.7
8/15/92 1115.7
9/15/92 956.3
10/15/92 942
11/15/92 779.1
12/15/92 749.3
1/15/93 539
2/15/93 384
3/15/93 223.4
4/15/93 119.1
5/15/93 -169.9
6/15/93 -279.2
7/15/93 -470.8
8/15/93 -570.6
9/15/93 -656.9
10/15/93 -803.5
11/15/93 -778.6
12/15/93 -978.6
1/15/94 -817
2/15/94 -631.2
3/15/94 -664.3
4/15/94 -638.7
5/15/94 -492.5
6/15/94 -498.4
7/15/94 -327
8/15/94 -266.4
9/15/94 -150.6
10/15/94 -9.8
11/15/94 280.6
12/15/94 725.1
1/15/95 969.9
2/15/95 1045.9
3/15/95 1435.6
4/15/95 1637.9
5/15/95 1863.2
6/15/95 1883.5
7/15/95 1873
8/15/95 1795.7
9/15/95 1776.3
10/15/95 1641.6
11/15/95 1585.2
12/15/95 1369.2
1/15/96 1027.5
2/15/96 909.4
3/15/96 645.8
4/15/96 556.5
5/15/96 387.5
6/15/96 465.1
7/15/96 338.2
8/15/96 101.8
9/15/96 -81.9
10/15/96 -480.7
11/15/96 -816.6
12/15/96 -1095
1/15/97 -768
2/15/97 -395.3
3/15/97 -695.5
4/15/97 -1000.8
5/15/97 -1072.5
6/15/97 -1161.1
7/15/97 -1333.7
8/15/97 -1083.5
9/15/97 -1257
10/15/97 -1388.4
11/15/97 -1581.9
12/15/97 -1876.6
1/15/98 -2534.7
2/15/98 -3116.4
3/15/98 -3074.8
4/15/98 -3092.2
5/15/98 -3355.9
6/15/98 -3510
7/15/98 -3704.9
8/15/98 -4009.8
9/15/98 -3889.1
10/15/98 -3492.7
11/15/98 -3190.7
12/15/98 -2607.8
1/15/99
2/15/99
</TABLE>
Source: Celfin
7
<PAGE>
- --------------------------------------------------------------------------------
THE CHILE FUND, INC.
POLITICS - PRESIDENTIAL ELECTIONS 1999
- - President Frei, who took office in March 1994, has placed improving Chile's
education system and developing foreign export markets at the top of his
economic agenda
- - The current government made up along center and socialist party lines is, in
our opinion, economically and socially reformist, although has not been able
to bring about swift or sweeping reforms
- - Favorite candidate in this year's election is Ricardo Lagos, a former
Minister of Education and Minister of Public Works who is aligned with
the Socialist Party
- - Lagos has the ability to create a strong administration and could change the
image of the Socialist Party
8
<PAGE>
- --------------------------------------------------------------------------------
THE CHILE FUND, INC.
DE-COUPLING OF CHILE FROM LATAM
CHILE FISCAL SURPLUS (DEFICIT) 1990-1997
[GRAPH]
In the printed version of the document, a vertical graph appears which
depicts the following plot points:
<TABLE>
<CAPTION>
CHILE FISCAL SURPLUS
YEAR DEFICIT AS A % OF GDP
<S> <C>
1990 1.5
1991 2.5
1992 4.3
1993 3.8
1994 3.6
1995 4.7
1996 4.5
1997 3.6
1998 0.8
1999E 0
2000E 0.8
</TABLE>
CHILEAN EXPORT DESTINATIONS - 1998
[CHART]
In the printed version of the document, a pie chart appears which
depicts the following percentages:
<TABLE>
<CAPTION>
REGION PERCENT EXPORTED
<S> <C>
European Union 26.10%
Mercosur 11.00%
Nafta 21.90%
Asia 26.90%
Other 14.10%
</TABLE>
- - During 1998, contagion set in as markets were coupled and global emerging
markets were battered by currency scares, inflated interest rates and
lower economic growth
- - Chile is the only country in the region that can claim a fiscal budget
surplus, moreover, this surplus as a percent of GDP is declining
- - Investors fear that Brazil will pull down the region, taking Chile with it
- - Structural issues, such as market liquidity, AFP investment abroad,
capital controls, and the presidential election in December 1999, remain
worrying to investors
- - Fundamentals regarding currency, exports and economics support de-coupling
Chile from Latin America
9
<PAGE>
- --------------------------------------------------------------------------------
THE CHILE FUND, INC.
AFPS - ADMINISTRADORES DE FONDOS DE PENSIONES
- - AFPs have ceased being the heart and soul behind Chilean equities, however,
AFPs investments remain an important indicator for Chilean equity market
sentiment.
- - AFPs exposure in local equities has fallen to 14.6% in January 1999, or
US$4.5 billion, as compared to 20.0% one year ago. The reason is
increasing market apathy and lack of required liquidity.
- - Foreign investments have grown by 343% during one year, to represent 6.2%,
or US$1.9 billion, of the total portfolio as at January 1999.
<TABLE>
<CAPTION>
CHILEAN PENSION FUND PORTFOLIOS 1990-1998
- -----------------------------------------------------------------------------------------------------------------------------
Debt Instruments Equity
---------------------------------- --------------------
------------------------------------------------------------
AUM Total Return Government Mortgages & Corporate Fin. Inst. Closed End Foreign
31 Dec (US$ MM) (YOY) Debt Sector Deposits Bonds Papers Stocks Mut. Funds Investments
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1990 4,741 15.6% 44.1% 32.4% 11.1% 1.1% 11.3% 0.0% 0.0%
1991 7,160 29.7% 38.3% 25.1% 11.1% 1.5% 23.8% 0.0% 0.0%
1992 12,388 3.0% 40.9% 23.6% 9.6% 1.6% 24.0% 0.0% 0.0%
1993 16,030 16.2% 39.3% 19.2% 7.3% 1.4% 31.8% 0.3% 0.6%
1994 22,448 18.2% 39.7% 18.5% 6.3% 1.6% 32.1% 0.9% 0.9%
1995 25,131 -2.5% 39.4% 21.1% 5.3% 2.0% 29.4% 2.6% 0.2%
1996 27,198 3.5% 42.1% 22.1% 4.7% 2.5% 25.1% 3.0% 0.5%
1997 29,889 4.7% 39.6% 27.7% 3.3% 2.5% 22.6% 3.1% 1.2%
1998 31,145 -1.1% 41.0% 30.2% 3.8% 1.9% 14.5% 2.9% 5.6%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
- --------------------------------------------------------------------------------
THE CHILE FUND, INC.
ENCAJE - PUNITIVE RESERVES REQUIREMENTS
CHILEAN IPSA
[GRAPH]
In the printed version of the document, a line graph appears which
depicts the following plot points:
<TABLE>
<CAPTION>
Date Closing Price (Chilean Peso)
<S> <C>
29-Apr-94 101.3975
31-May-94 110.6352
30-Jun-94 106.2913
29-Jul-94 106.8667
31-Aug-94 119.3398
30-Sep-94 125.3603
31-Oct-94 138.8593
30-Nov-94 135.5115
30-Dec-94 127.8801
31-Jan-95 121.7888
28-Feb-95 118.2975
31-Mar-95 115.2153
28-Apr-95 123.2468
31-May-95 133.3628
30-Jun-95 136.4577
31-Jul-95 130.8562
31-Aug-95 125.8941
29-Sep-95 122.8759
31-Oct-95 127.416
30-Nov-95 121.2005
29-Dec-95 129.4238
31-Jan-96 128.7379
29-Feb-96 128.6732
29-Mar-96 123.3927
30-Apr-96 128.5438
31-May-96 125.9553
28-Jun-96 131.8052
31-Jul-96 128.7379
30-Aug-96 124.3246
30-Sep-96 127.5213
31-Oct-96 127.6507
29-Nov-96 119.8983
31-Dec-96 114.4366
31-Jan-97 126.4982
28-Feb-97 132.7121
31-Mar-97 130.0228
30-Apr-97 135.9392
30-May-97 148.676
30-Jun-97 150.5527
31-Jul-97 153.448
29-Aug-97 145.6205
30-Sep-97 146.3415
31-Oct-97 135.3327
28-Nov-97 131.8309
31-Dec-97 129.1989
30-Jan-98 115.2842
27-Feb-98 127.2481
31-Mar-98 135.0258
30-Apr-98 126.4858
29-May-98 115.6718
30-Jun-98 109.3928
31-Jul-98 114.7028
31-Aug-98 80.4522
30-Sep-98 85.0129
30-Oct-98 93.1266
30-Nov-98 105.3488
31-Dec-98 100
29-Jan-99 103.03
26-Feb-99 109.27
31-Mar-99 118.43
5-Apr-99 119.36
</TABLE>
Source: Celfin
- - In 1990, the Chilean Central Bank introduced a 30% encaje, (reserve
requirements) on short-term capital for external credits
- - In June 1995, the encaje was extended to include all financial investments
in the local market, as well as the ADR arbitrage. This caused a great
damage to volumes in the Santiago stock Exchange.
- - In June 1998, the encaje was reduced to 10% and in September the encaje was
completely eliminated
- - Removal of the encaje, has had a minimal impact on trading volumes and is
not likely to result in a significant inflow of foreign capital
- - Removal of the one-year holding period is the key
11
<PAGE>
- --------------------------------------------------------------------------------
THE CHILE FUND, INC.
STOCK MARKET REVIEW
CHILE: 12 MONTH FORWARD P/E
[GRAPH]
In the printed version of the document, a line graph appears which
depicts the following points:
<TABLE>
<CAPTION>
DATE 12MF PE MEAN +1 STDEV -1 STDEV
<S> <C> <C> <C> <C>
01/10/1997 10.53 12.4 15.45 9.35
01/17/1997 10.92 12.4 15.45 9.35
01/24/1997 10.81 12.4 15.45 9.35
01/31/1997 10.95 12.4 15.45 9.35
02/07/1997 11.3 12.4 15.45 9.35
02/14/1997 11.77 12.4 15.45 9.35
02/21/1997 11.61 12.4 15.45 9.35
02/28/1997 11.77 12.4 15.45 9.35
03/07/1997 11.91 12.4 15.45 9.35
03/14/1997 11.97 12.4 15.45 9.35
03/21/1997 11.82 12.4 15.45 9.35
03/28/1997 11.88 12.4 15.45 9.35
04/04/1997 11.99 12.4 15.45 9.35
04/11/1997 11.96 12.4 15.45 9.35
04/18/1997 11.93 12.4 15.45 9.35
04/25/1997 12.17 12.4 15.45 9.35
05/02/1997 12.85 12.4 15.45 9.35
05/09/1997 12.84 12.4 15.45 9.35
05/16/1997 12.86 12.4 15.45 9.35
05/23/1997 13.2 12.4 15.45 9.35
05/30/1997 13.46 12.4 15.45 9.35
06/06/1997 13.88 12.4 15.45 9.35
06/13/1997 14.48 12.4 15.45 9.35
06/20/1997 14.7 12.4 15.45 9.35
06/27/1997 14.98 12.4 15.45 9.35
07/04/1997 15.89 12.4 15.45 9.35
07/11/1997 16.12 12.4 15.45 9.35
07/18/1997 14.81 12.4 15.45 9.35
07/25/1997 15.7 12.4 15.45 9.35
08/01/1997 16.4 12.4 15.45 9.35
08/08/1997 16.4 12.4 15.45 9.35
08/15/1997 15.94 12.4 15.45 9.35
08/22/1997 15.68 12.4 15.45 9.35
08/29/1997 16.07 12.4 15.45 9.35
09/05/1997 16.54 12.4 15.45 9.35
09/12/1997 16.12 12.4 15.45 9.35
09/19/1997 16.68 12.4 15.45 9.35
09/26/1997 16.79 12.4 15.45 9.35
10/03/1997 18.2 12.4 15.45 9.35
10/10/1997 18.05 12.4 15.45 9.35
10/17/1997 17.95 12.4 15.45 9.35
10/24/1997 16.9 12.4 15.45 9.35
10/31/1997 14.17 12.4 15.45 9.35
11/07/1997 13.99 12.4 15.45 9.35
11/14/1997 13.5 12.4 15.45 9.35
11/21/1997 14.53 12.4 15.45 9.35
11/28/1997 14.63 12.4 15.45 9.35
12/05/1997 15.27 12.4 15.45 9.35
12/12/1997 14.28 12.4 15.45 9.35
12/19/1997 14.33 12.4 15.45 9.35
12/26/1997 14.72 12.4 15.45 9.35
01/02/1998 15.46 12.4 15.45 9.35
01/09/1998 13.52 12.4 15.45 9.35
01/16/1998 13.74 12.4 15.45 9.35
01/23/1998 13.6 12.4 15.45 9.35
01/30/1998 13.71 12.4 15.45 9.35
02/06/1998 13.83 12.4 15.45 9.35
02/13/1998 13.9 12.4 15.45 9.35
02/20/1998 13.81 12.4 15.45 9.35
02/27/1998 14.09 12.4 15.45 9.35
03/06/1998 14.13 12.4 15.45 9.35
03/13/1998 14.43 12.4 15.45 9.35
03/20/1998 14.68 12.4 15.45 9.35
03/27/1998 14.8 12.4 15.45 9.35
04/03/1998 14.22 12.4 15.45 9.35
04/10/1998 14.28 12.4 15.45 9.35
04/17/1998 14.36 12.4 15.45 9.35
04/24/1998 14.27 12.4 15.45 9.35
05/01/1998 13.86 12.4 15.45 9.35
05/08/1998 13.42 12.4 15.45 9.35
05/15/1998 13.02 12.4 15.45 9.35
05/22/1998 12.17 12.4 15.45 9.35
05/29/1998 11.77 12.4 15.45 9.35
06/05/1998 11.73 12.4 15.45 9.35
06/12/1998 10.84 12.4 15.45 9.35
06/19/1998 10.87 12.4 15.45 9.35
06/26/1998 10.58 12.4 15.45 9.35
07/03/1998 10.84 12.4 15.45 9.35
07/10/1998 11.07 12.4 15.45 9.35
07/17/1998 11.72 12.4 15.45 9.35
07/24/1998 11.24 12.4 15.45 9.35
07/31/1998 11.03 12.4 15.45 9.35
08/07/1998 9.64 12.4 15.45 9.35
08/14/1998 9 12.4 15.45 9.35
08/21/1998 8.07 12.4 15.45 9.35
08/28/1998 7.03 12.4 15.45 9.35
09/04/1998 6.26 12.4 15.45 9.35
09/11/1998 5.8 12.4 15.45 9.35
09/18/1998 6.84 12.4 15.45 9.35
09/25/1998 7.19 12.4 15.45 9.35
10/02/1998 6.74 12.4 15.45 9.35
10/09/1998 6.65 12.4 15.45 9.35
10/16/1998 7.13 12.4 15.45 9.35
10/23/1998 7.52 12.4 15.45 9.35
10/30/1998 7.45 12.4 15.45 9.35
11/06/1998 8.43 12.4 15.45 9.35
11/13/1998 7.97 12.4 15.45 9.35
11/20/1998 8.4 12.4 15.45 9.35
11/27/1998 8.68 12.4 15.45 9.35
12/04/1998 7.88 12.4 15.45 9.35
12/11/1998 7.7 12.4 15.45 9.35
12/18/1998 7.55 12.4 15.45 9.35
12/25/1998 7.86 12.4 15.45 9.35
</TABLE>
Source: Bear Stearns, 2/26/99
- - Market valuation has fallen to historically low levels
- - De-rating has been driven by a combination of global concerns and
domestic factors
- - Sharp deterioration in external accounts as commodity prices
(especially copper) decline
- - Lack of domestic hedging instruments forced undue pressure on
exchange rate and subsequent tightening of monetary policy
- - Domestic economic demand was excessive
- - AFP's are selling, to invest overseas
12
<PAGE>
- --------------------------------------------------------------------------------
THE CHILE FUND, INC.
POLICY AND MARKET OUTLOOK FOR 1999
- - Interest rates are at 7.25% (real) now, we expect rates to decline to
6.00%
- - Commodities pricing is a key concern, copper must hold at 64 cents or
our outlook for interest rates and the currency will be wrong
- - Currency is likely to be affected by AFP's outflows and FDI inflows
(Endesa Espana, etc.)
- - Political influences likely to grow: a Lagos victory looks likely and
this might scare off some investors
- - Corporate profits remain muted: no spectacular upside expected this year
compared to last
- - Stock market liquidity continues to be a big problem which maybe
exacerbated by corporate activity in the utility sector
13
<PAGE>
- --------------------------------------------------------------------------------
THE CHILE FUND, INC.
CONCLUSIONS
- - Strong track record, excellent local advisor
- - Relatively liquid, diversified vehicle
- - Structured to provide exposure to the main Blue Chips, plus a number of
less liquid opportunities
- - Prospects for Chile are mixed, but adjustment is well underway, and
there is nothing in the price for a recovery in commodities
14
