What Jumps Out: End Of A Busy Week
It was an eclectic week, even by Colombian standards.
As expected, President Petro flew to Davos to be upstanding in front of the world. The discourse didn’t deviate from that expected, as Petro promoted Latin America’s capacity to convert to green energy when compared to other regions of the world – Colombia is at the forefront of that. Mining Minister Velez spoke of the urgent need to freeze oil exploration licenses and prioritize tourism and agriculture, which in time will be a good strategy but somewhat at odds with what Finance Minister Ocampo said more recently, never helpful.
Ecopetrol’s (NYSE: EC) Felipe Bayón was also in Davos as the company was invited to join the World Hydrogen Council – the only company in the region who are part of the entity. The stock itself is doing well, trading at levels not seen since before President Petro was elected.
The week started the Real Sector data for November and whilst the Manufacturing Production number (4.5%) was in line with expectations and only moderately lower than 5.3% in October the Retail Sales number was a different issue. Whilst it rose 1.7% on a headline basis, it was below the consensus of 1.9% and more concerningly once all the various elements related to vehicles are stripped out – the number was 0.4%.
On Wednesday we had the Economic Activity reading for November and it fell once again to 3% – it stood at 4.6% in October. To context that, it is the lowest reading since March 2021 when the comparable was with the low point of Covid, a clear reflection of a slowdown.
Another number that slipped under the radar was the Sept-Nov informal employment data. It stood at 58.2% on a national basis and 43.9% when measured in urban areas. Whilst there are years of work ahead to lower the numbers, these were at least lower than the previous time.
The final data of the week was the Import numbers for November – it was down 7.7% YoY but at US$6.04bn it was still a big number. The Trade Deficit of US$1.1bn was also unwelcome, if expected. Manufacturing, which is the dominant sector fell 12% and this dragged the overall number downwards. Sectors such as Vehicles, Pharma and Iron & Steel.
The markets followed those overseas which meant they were tentative. As mentioned above, Ecopetrol fared well due to China and the oil price, although now it is beginning to buttress up against its price targets. Oil also kept the Peso honest, battle has been joined at the ~$4680 resistance level but the currency appears to want to head lower still.
Please find below the LinkedIn Video :
All in all – a busy week – have a good weekend.