Bloomberg News

Colombia Equity Offerings to Challenge 2011 Record, Cordoba Says

February 03, 2012

Feb. 2 (Bloomberg) -- The number of Colombian equity offerings will likely match last year’s record eight deals as businesses fund expansions to tap the fastest economic growth in nearly five years, said the head of the country’s bourse.

Share sales in the Andean nation exceeded $7 billion last year, more than twice the previous record set in 2007, as Colombian, Peruvian and Chilean exchanges integrated trading in the first Latin American bourse combination, said Juan Pablo Cordoba, president of Bolsa de Valores de Colombia.

“I don’t think we’ll see a repeat of those size of issues, but we’ll see about the same number of offerings as new companies come to market this year,” Cordoba said yesterday in an interview at his office in Bogota.

Companies throughout the region seeking to expand are using the three-nation Andean integration as a “platform” for raising the needed funds, Cordoba said. Mexico may join the integrated market as soon as this year after studying the legal implications, he said.

Colombia’s central bank unexpectedly raised the overnight interest rate to 5 percent on Jan. 30 after third-quarter gross domestic product expanded at the fastest pace since 2006, defying President Juan Manuel Santos who said an increase wouldn’t be appropriate.

Foreign Investment

The growth has been driven by infrastructure projects and a wave of foreign investment in oil, coal and gold exploration in areas that were once overrun by violence. Gross domestic product expanded 7.7 percent in the third quarter from a year ago, leading the central bank to project growth of as much as 6 percent for 2011. The bank said the economy will grow between 4 and 6 percent in 2012.

Bancolombia SA, Colombia’s biggest bank, sold $661 million worth of shares in a sale that ended Jan. 27. Ecopetrol SA, Carvajal SA, Construcciones El Condor SA, and Contourglobal Latam SA are among companies that have expressed interest in selling shares in Colombia in 2012.

Grupo de Inversiones Suramericana SA, Grupo Nutresa SA, and Avianca Taca Holding SA were among companies that sold stock last year in Bogota to help pay for acquisitions.

Colombia’s benchmark IGBC Index surged 9.5 percent in January after falling 18 percent last year.

--Editors: Richard Richtmyer, James Attwood.

BVC CB BCOLO CB ECOPETL CB GRUPOSUR CB

To contact the reporters on this story: Blake Schmidt in Bogota bschmidt16@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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