With the arrival of December and a valuation of the Colcap stock index of the Colombian Stock Exchange of 16.47%, in the short term there does not seem to be in the picture reason for the titles to go down. They could even end the year rising a little more.
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The reason for this is that on December 20 the meeting of the Board of Directors of Banco de la República will be held, in which, according to most analysts, There will be a new reduction in the monetary policy rate, which today is 9.75% EA
Thus, according to market analysts, lower interest rates are expected to be the catalyst for the rebound of the Colombian stock market in the coming months.
However, anticipating the performance that the stock market in Colombia may have is not an easy task.
According to the book Vision Davivienda, low trading volumes affecting correct price formation and expectations, added to other complexities such as the reduced confluence of issuers and investors, imposes great challenges on this work.
(See: Board of Directors of the Banco de la República reaffirms its inflation goal of 3% for 2025)
Actions
Likewise, the environment of uncertainty in the country, due to the multiple regulatory changes proposed, proposed reforms and changes within the companies in which the National Government has a stake, adds to the challenge of setting the perspective for 2025.
Analysts from the Bolívar Davivienda group say that for years, and with judicious valuation exercises of Colombian companies, it has been shown that the imbalance of market prices Compared to the fundamental indicators of the majority of companies, it is evident. “However, the market has only agreed with us when a corporate transaction materializes”says the book Vision Davivienda.
They say that in 2025 “We will have a very important catalyst that will not go unnoticed; the impact of the downward adjustment in interest rates”. And this has a positive effect from different fronts.
The first is the profitability of shares, which is once again attractive compared to fixed income.
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Finance
The lower cost of debt will favor the recovery of profits in companies in the real sector and, therefore, the distribution of dividend payments.
They assure that lower cost of capital opens, again, the opportunity for profitable growth for companies.
They mention that high interest rates, which have persisted for more than two years, have generated a very low appetite for risk assets such as stocks or real estate assets.
For months, fixed income assets have stood out for offering very high profitability to investors, 360-day CDT rates, which in 2022 reached a maximum of 18%they are currently very close to 9.5%; for now, the same as the dividend return of the Colcap index, but this will not be the case for long.
The Davivienda team of researchers say that the intervention rate of the Bank of the Republic has already fallen from 13.25% at the end of 2023 and “we estimate that it will stand at 9.0% at the end of this year and reach 5. 75% in 2025 and CDT rates will continue to fall, at least to 8% by the end of that year.”
They also ensure that the lower cost of debt will favor the recovery of profits in companies in the real sector and, therefore, the distribution of dividends and probably the behavior of share prices on the stock market.
Furthermore, they remember that financial expenses have generated very strong downward pressure on company profits.
Most companies have part of their debt indexed to indicators such as the IBR or the CPI (or other similar indicators in the countries where they operate), which have had historic increases in recent years.
The shares that have increased the most in price on the Colombian stock market this year are led by Mineros, with 129.97% appreciation, followed by Cementos Argos Preferential (PF) with 115.11%. This stock has been helped by the sale of its stake in Summit Materials in the US and its prospects.
Nutresa has risen 75.56%, Grupo Sura PF rises 72.74%, Promigasel 67.39%, Grupo Argos PF 65.48%, Grupo Argos 61.19%, Cementos Argos 57.45% and Terpel 44.52%, among others.
For its part, those that drop the most are those of Canacol Energy CNEC (-41.92%), Éxito (-40.03%) and Ecopetrol (-23.08%).
(Read more: Financial crisis in Colombian health: EPS debt reaches $18.9 billion)
HOLMAN RODRÍGUEZ MARTÍNEZ
Portfolio
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