Category: Regions

Meanwhile, Colombia may sell local-currency bonds in the international markets later this month, citing increased investor demand and the narrowing spreads between yields of the bonds sold internationally and in the local market. This will be the third peso-denominated international sale for Colombia. It sold $300 million of 10-year bonds in February and last November it issued $375 million-worth of bonds maturing 2010. Earlier this week, Brazil successfully sold $1.5 billion of real-denominated bonds to international investors.

Lucio Gutiérrez, former president of Ecuador has sought asylum in Colombia. He has been given leave to stay for 90 days while Colombia assesses his case. Gutiérrez says he plans to return to Ecuador shortly and branded his successor, Alfredo Palacio, a liar. The former colonel was ousted from power on 20 April this year by Congress after he dissolved the Supreme Court sparking protests in the country. In June Gutiérrez gave up his political asylum status in Brazil, granted following his exit from Ecuador.

Colombia’s largest cement producer, Cementos del Caribe, part of Cemento Argos, is to issue P850 billion ($369.4 million) of bonds in the local markets. The company already has 51% market share in Colombia and is thought to be gearing up to increase investment to take advantage of opportunities in the rebuilding of the US gulf coast.

The profits of Colombian banks rose 29.3% to $1 billion in the first half of 2005. Most gains were seen in private financial institutions, which accounted for 77% of earnings worth $774 million, followed by state banks with 12.5% or $12.9 million.

Colombia increased its buyback of dollar- and euro-denominated bonds from $700 million to $1.1 billion. It was the largest such operation ever carried out by the sovereign. The Finance Ministry said it decided to increase the amount because of large bondholder interest. The buyback was carried out last Wednesday and was led by Goldman Sachs and Merrill Lynch.

Foreign portfolio investment in Colombian equities to August rose 15.8% to $955.6 million, compared with figures to July. This is up 178.8% compared with the same period in 2004. Analysts attribute the rise to the country’s improved economic performance and the weakness of the dollar. Meanwhile, foreign portfolio investment in debt was down by 14.5% to $346.6 million, although year-on-year investment was up 254.6%.

In a surprise move on Friday, Colombia cut its overnight lending rate from 6.5% to 6%, the first reduction since December last year. The cut is aimed at slowing the rise of the peso to protect local exporters. The Colombian currency has strengthened 10% against the dollar over the past 12 months.