Colombia’s benchmark IGBC stock index Thursday ended at an all-time record high as part of a year-end rally.
The index rose 1.2% to end at 11,558.72 points. The previous IGBC highest close was registered on Nov. 23, 2007, at 11,438.88 points. The Colcap index, which includes the largest companies by market capitalization, rose 1.5% to 1,356.57 points.
“There are several reasons. First, low interest rates in the country encourage people to buy stocks. Then there are tax breaks for assets parked on the stock market, so people tend to have more appetite for stocks at the end of the year, and then there is a lot of liquidity,” said Andres Jimenez, a Medellin-based market analyst with local brokerage Interbolsa.
Jimenez expects the index to keep rising. “I’m bullish, but with caution,” he said.
A lot of share prices are already expensive compared to what Jimenez’s brokerage reckons.
“The expected 2010 economic recovery is already included in current prices,” he added.
The most-traded shares were from Colombia’s largest holding company Grupo de Inversiones Suramericana SA, which rose 0.3% to 23,840 Colombian pesos.
Shares of state-controlled oil company Ecopetrol SA rose 1% to COP2,585, while shares of state-controlled transmission grid operator Interconexion Electrica SA rose 2.5% to COP12,120.
The peso appreciated to COP1,991 from COP1,992.61.
On the debt market, the yield on the benchmark government peso-denominated bond maturing in 2020 rose to 7.94% from 7.868% on Wednesday. (Dow Jones)