The Colombia IGBC index, the benchmark for the country, cruised past the 15,100 threshold Wednesday, continuing a streak of record highs for local stocks.
The IGBC index closed at 15,170, climbing 1.6% Wednesday. The index has gained 31% so far this year. The index was propelled Wednesday by shares of state-run oil company Ecopetrol SA, Colombia’s largest company, which rose 5.2% to COP4,050.
Ecopetrol has benefited from the recent increases in its production target for next year, said Angelica Dominguez, an analyst with local brokerage Bolsa y Renta.
“The company’s outlook is improving and there’s a lot of liquidity in the market right now so investors are buying Ecopetrol shares,” Dominguez said.
The company plans to increase oil production to up to 750,000 barrels a day in 2011, Chief Executive Javier Gutierrez said Monday from New York.
The company, which produced 580,000 barrels a day in the second quarter, expects to increase production from several of its existing fields, while also nearly doubling production from the assets in Colombia it recently purchased from BP PLC.
Shares of Banco Davivienda, Colombia’s third-largest bank by assets, rose 2.9% to COP22,600. Davivienda made its debut on the local stock exchange Tuesday, with its shares climbing 36%.
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 peso, meanwhile, weakened to COP1,789.5 from Tuesday’s close of COP1,801.5. 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 $20.3 million Wednesday at a rate of COP1,796.
The yield on the benchmark 2020 peso-denominated bond closed at 7.170% from 7.384% Tuesday. The yield on the bonds declined on the lower-than-expected inflation readings for September. Consumer prices in Colombia declined 0.14% in September while the market consensus had pointed to 0.08% increase.
Inflation over the 12 months through September was 2.28%. The central bank has an inflation target range of 2% to 4% for the year, and the low inflation readings allowed the bank to slash its benchmark interest rate to 3% earlier this year. (Darcy Crowe / Dow Jones Newswires)
