Colombia’s benchmark IGBC stock index rose 0.78% on Wednesday to another all-time high of 11,683.43 points. The rally is being driven by low interest rates, higher world markets and local tax incentives.
“There’s a lot of liquidity, and shares offer a mechanism for getting end-of-year tax breaks,” said Andres Otalora, a market analyst at local brokerage Profesionales de Bolsa.
Colombians often buy assets in November and December to avoid holding cash when the tax year ends December 31.
Shares in Bancolombia rose 1.57%, while state-controlled oil company Ecopetrol fell 0.40%.
“Bancolombia was helped by the rise in financial stocks worldwide,” Otalora said. “In the morning Ecopetrol went up when the news came out that oil inventories in the U.S. were lower than the market was expecting. After that, the euphoria subsided and the price went back to yesterday’s levels.”
The peso weakened slightly to COP2,003.80 against the dollar, from COP2,003 on Tuesday.
On the debt markets, the yield on the benchmark peso-denominated bond maturing in 2020 fell to 8.323% from 8.342% on Tuesday.
(Dow Jones)