Foreign investors who trade on Colombia’s stock exchange are buying less this year, according to a survey of analysts on Wednesday published by local media.
“Foreign investors have begun to move from emerging markets toward developed ones,” Analyst Nicolas Noreña of Serfinca, told local media.
“It’s mainly because the good times that are happening in the U.S.”
After worries of the United States Federal Central Bank pulling back its stimulus measures have coursed through the world of global finance, investors are generally migrating away from emerging markets like Colombia, and turning their interest toward developed economies.
But foreign investors haven’t completely forgotten about Colombia. In fact, far from it. Investment in Colombia’s domestic stock market still outpaces local investors. La Republica, a local financial newspaper, says that foreign investors are still the main buyers in the national bourse.
Investors from abroad, however are buying less than they were last year. Compared to the same period in 2012, investments are down 23.3% in 2013, registering $134 million of inflows on the Bogota-based stock market.
How this will effect the Colombian economy is still yet to be seen. Demand on the peso has eased after government macroeconomic policies aimed to tame a strong rally throughout the end of 2012. The peso has weakened from 1,767 to 1,935 against the dollar since the beginning of the year.
Coupled with the peso’s depreciation against the dollar, an oil and mining boom has reached what analysts believe to be a peak.
Colombia has focused a great deal of energy on a campaign to attract foreign investors to put their money on Colombia, from trading on its stock market to long-term infrastructure projects.
In 2012, more than 50% of Colombia’s $16 billion in foreign direct investment inflows went to its mining sector. JP Morgan forecasts that total foreign direct investment will fall to somewhere near $14.5 billion in 2013.
Sources
- Extranjeros siguen comprando pero en menor volumen (La Republica)
- Economic Research Global Data Watch: Colombia (JP Morgan)
- JP Morgan Prevé Para 2013 Que Inversión Extranjera Llegue A US$14.500 Millones (La Republica)