What Jumps Out: A Market For Everybody

A Market for Everybody: That is this week’s phrase from the joint Asobolsa and Bolsa de Valores de Colombia (BVC) event in Cartagena, where there are only 200 members of a financial community (a few of which paid), shut in a room, where the other 100,000 can’t hear them. BVC’s Twitter account has accurately reflected the fact that it was a day of soundbites and few ideas or solutions.

Unemployment data from the National Administrative Department of Statistics (DANE) for July was once again favorable, with both the urban (9.8%) and national (9.6%) rates down (from 11.3% and 11.0%, respectively) from a year ago. Both readings (apples vs. apples) saw their lowest July reading since 2015. In nominal terms, on a national basis, there are 22.9 million persons working — up 3.8% (~847,000) from a year ago. There is still plenty of work to do on gender, with women seeing an occupancy level of 47.1% vs. 11.9% unemployment. This compares with 71.0% and 7.9%, respectively, for men.

Banco de la República sat down yesterday, but as we know it was a “coffee and biscuits” meeting with no decision on rate changes or subsequent press conference. All eyes will be on August consumer price index (CPI) next week and then waiting to see the size of the (expected) rate cut from Colombia’s central bank in September.

In terms of politics and reforms, it has been a week of jousting as opposed to hostilities and, as ever, you have to wade through the vested interests of both the press and politicians. The National Business Association of Colombia (ANDI) last week was asking to be part of a broad-based dialogue about the country’s future but, at least in terms of the lLabour reform, the government is suggesting that after 12 months of being criticized by the private sector, they will go it alone. It’s a shame when there isn’t dialogue but the ANDI and private sector are equally to blame.

The transport strike on Monday, was a damp squib and with the government already stating that there is no intention to raise diesel prices — or to give taxi drivers preferential fuel rates — the subject looks closed. Prices for the next few months will continue to rise as the government continues to attack the fuel subsidy hole left by their predecessors.

Year to date, the government has now imported 309,000 tons of LNG in order to combat El Niño and falling reservoir levels. This is 60% above the 2022 total but necessary until the country can reverse years of declining production. Some elements are trying to pin this shortage on Gustavo Petro (nothing new here), but the shortfall in gas production has been years in the making.

Gonzalo Perez will retire from CEO of Grupo SURA after three years. The search is now on for his replacement (in reality, it will be from within the group).

On the equity markets, there has been little activity — and Asobolsa won’t change that. The peso was quiet around the 4,100 peso level to the dollar while awaiting the next FOMC meeting in the United States.