Colombian stocks hit all-time high; peso resumes rally

Colombia’s benchmark IGBC stock index closed up 0.61% at an all-time record high of 11,709.91 points Thursday, driven by high levels of liquidity and gains in some of the index’s heaviest-weighted stocks.

State-controlled power-generation firm Isagen rose 1.8% on speculation that Finance Minister Oscar Ivan Zuluaga will announce the sale of the government’s 57.66% stake in the company on Monday, when he presents his fiscal projection for 2010.

“There was a lot of uncertainty last year over what the government would do,” said Jairo Lastra, an analyst with local brokerage Proyectar Valores SA. “It could be that people are buying the share thinking that someone big is going to participate in the company, and pay a good price.”

The country’s largest cement marker, Cementos Argos, gained 1.42% after the company filed a statement to Colombia’s market regulator saying its 600,000 metric-ton-a-year cement plant in Haiti had not been structurally damaged by the earthquake that devastated the Haitian capital Port au Prince on Tuesday, leaving tens of thousands dead and injured.

Cementos Argos has a 65% stake in the plant, which is located 25 kilometers outside Port au Prince, the company said in its statement. The company said it would support relief efforts by the Colombian government and international aid agencies.

One broker said that Cementos Argos rose because its share price had become cheap relative to holding company Inversiones Argos SA, which owns a majority stake in the cement maker.

“The most reasonable explanation for the rise in Cemargos was arbitrage,” said Natalia Agudelo, an analyst with local brokerage Interbolsa.

Shares in Colombia’s largest retailer Almacenes Exito SA fell 1%, while state-controlled oil firm Ecopetrol SA gained 0.62%.

The Colombian peso resumed its rally, strengthening to COP1,969.25, from COP1,973 on Wednesday. The currency has firmed in early January on the belief that the government is selling dollars it had raised from international bond sales.

On the debt markets, the yield on the benchmark peso-denominated bond maturing in 2020 rose to 8.873%, from 8.862% on Wednesday.

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