Colombian stocks decline further; peso weakens

Colombian stocks moved lower Wednesday and are now down 6% so far in 2011 as the commodities-heavy exchange suffers from worries over the effects of China’s interest-rate hike.

The IGBC index, considered the benchmark for Colombia, posted a 0.30% decline to close at 14,504.31.

“We are now a commodity exchange and if China is going to finish the commodities party via interest rate increases, we are going to take it on the chin for sure,” Andres Jimenez, an analyst at Colombian brokerage InterBolsa, said in a report Wednesday morning.

The People’s Bank of China said Tuesday it would raise its benchmark lending and deposit rates by 0.25 percentage points, effective Wednesday. Analysts said rapid loan growth and surging consumer prices in January were behind China’s move.

The Colombian exchange’s index losses came Wednesday despite a strong gain in the heaviest-weighted share, oil firm Pacific Rubiales Energy (PEGFF, PRE.T). Its shares rose 1.77% to COP58,620.

The Colombian peso, meanwhile, weakened to close at COP1,887.30 to the dollar from COP1,885.00 on Tuesday.

The yield on the benchmark 2020 peso-denominated bond known as TES, stood at 8.189%, unchanged from a day earlier.

(Dow Jones Newswires, Dan Molinski)

Related posts

Colombia presents new tax reform ahead of new protests

Colombia’s government apparently abandons basic economics

Colombia’s loathed finance minister to resign after deadly protests: reports