Banco Davivienda, Colombia’s third largest bank by assets, climbed 36% in its debut in the local stock exchange, a sign of the growing appetite in the country for new listings.
Davivienda shares closed COP21,980 after opening at COP16,000.
“Investors are hungry for more stocks in Colombia,” said Jairo Lastra, an analyst with local brokerage Proyectar Valores SA. “More companies will consider listing because of the success of Davivienda,” he said.
The bank launched in August Colombia’s first initial public offering since 2007, selling a 6.4% stake through 26 million shares. Additionally, minority owners in the bank secured approval to float their stake in the exchange, raising to 14.5% Davivienda’s total stake floated in bourse.
The bank raised $228 million through the IPO, with demand reaching 13 times the stocks offered. Efrain Forero, the bank’s chief executive, has said the bank could list its shares in New York through an American depositary receipt after 18 months.
The IGBC stock index, the Colombian benchmark, rose 1.63% to a record high 14927 points. The index has appreciated 28.66% so far this year.
Lastra said investors are betting oil and mining companies doing business in Colombia and listed in Canada could have their shares traded in the local exchange before the end of the year, raising expectations that pent- up demand for equities could find new destinations.
The trading volume in the local bourse has been traditionally concentrated on a handful of shares.
The stock market is also working on a plan to integrate with the exchanges of Chile and Peru, which would allow investors to trade across markets. The first phase of the integration project is slated for late November.
The Colombian peso, meanwhile, strengthened to COP1,801.5 from COP1,803.95. The central bank announced in September that it would buy $20 million daily in the spot market for a minimum of four months in a bid to rein in the currency. The central bank bought $20 million Tuesday at COP1,804.
The yield on the benchmark 2020, peso-denominated bond stood at 7.384% from 7.363% on Monday. Darcy Crowe / Dow Jones Newswires)