What Jumps Out: The Week Ahead

As anticipated, there was little to glean from the weekend press, nothing new in my experience but with the World Cup now up and running, there was little room for anything else on the local front pages – one can only imagine if Colombia had actually qualified!

The end of last week featured a couple of headlines:

Bloomberg released their latest analyst survey and as per other surveys we have seen recently there is a continued upward trajectory for most numbers.

FY2022 GDP is expected to be 7.5% (7.3% previously) whilst for 2023 it has actually fallen to 1.8% from 1.9% – we will have to wait and see but most overseas agencies have it lower. In terms of inflation there was no change to the full year 2022 estimate of 10%, although that is going to require some benign data for November and December. For 2023 it has moved upwards from 7.8% to 8.6%. Finally interest rates are expected to rise to 12% by YE22, that means a 1% increase at the final meeting of the year in December.

Central Bank member Steiner was also upstanding on Friday, and he was discussing the stubbornness of a demand driven inflation versus supply. There is nonetheless a belief that within 2 years CPI will be down to the 3% target. One of the mechanisms to achieve this is by exploring the possibility of not index linking some products to what is likely to be a hefty increase in the minimum wage.

Ironically despite the stubborn inflation, the Central Bank at this Friday’s meeting will not be increasing rates, this is one of the four meetings a year where it is coffee, biscuits and a chat, as opposed to moving rates. Surely a situation that needs looking at – hopefully the November CPI reading is a shocker which puts the committee behind the curve again.

This week we also have from Fedesarrollo the latest Industrial and Retail Confidence numbers for October, they have been wavering somewhat recently but still no real signs of a slowdown, lets see.

Venezuela is rarely far from the headlines. We have the peace talks with the ELN set to take place in Caracas and also reports that natural gas is set to flow into Colombia via the 139-mile pipeline which was mothballed several years ago. The company involved in exporting 25 million cubic feet a day is Prodata Energy but  Ecopetrol is also seeking its own deal. There may be criticism of such deals, but the gas is cheap and plentiful at a time when Colombia production is falling, the lead in time to new supply is lengthy and where lifting costs could be high.

Finally the Grupo Nutresa tender came to nothing last week as neither Grupo Sura or Grupo Argos sold their stakes, a total of 7.71% of the shares were offered versus a minimum of 25%. Look for further developments this week as both companies conduct EGMS. Sura to vote in a new board and Nutresa to vote on changes to company statutes, although it isn’t clear as to what it relates to.

Please find here the video report from LinkedIn : https://www.linkedin.com/posts/rupert-stebbings-927b6316a_what-jumps-out-the-week-ahead-as-anticipated-activity-7000411906846916608-093c?utm_source=share&utm_medium=member_desktop

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That is about it for today – remember these are just themes that jump out at me – please refer to your local analyst, economist, salesperson or soothsayer for more details.

My regards to all,

Roops