Despite the misgivings expressed by experts for weeks about a possible victory for the left in Colombia, the reality, experts consulted by the Voice of America explain, is that the markets have barely shown signs of alert after Gustavo Petro took over with the presidency of the country last Sunday.
The reaction of the financial markets in Colombia after Petro’s victoryalthough it generated a rise in the value of the dollar and a fall in the shares of the stock market, it was rather timid, he explained to VOA the economist from the Universidad del Rosario Alejandro Useche.
“Although in the first minutes of trading the dollar this Tuesday, after a holiday and after knowing the name of the new president of Colombia, the price of the currency went from 3,902 pesos to a maximum of 4,089 pesos, however, after To overcome this volatility, at the end of the day the representative market rate stood at 4,023 pesos, which meant an increase of 3.1%”, said Useche.
Meanwhile, in the Colombian Stock Exchange there was a fall in shares that meant that the most representative stock index of the Stock Exchange, Colcap, fell from 1,454 points to 1,384 points, which means that on average the most traded shares and more valuable stocks fell 4.8 percent, he added.
Useche explained that in a stock market session not all stocks go up and down in the same proportion and that what happened on Tuesday affected much more the actions that are related to the energy mining sector, especially in the Colombian oil sector.
He recalled that one of Petro’s announcements in the campaign was to make an energy change, so that Colombia does not bet on new oil explorations in the future, but on seeking alternative sources and what this generates is an expectation that the new explorations they are going to slow down, that the production and profits of companies that engage in these activities are going to have difficulties and their profits are going to fall.
“Looking specifically at this Tuesday, the most undervalued stock was that of the state oil company Ecopetrol, which fell 12.68%, followed by Mineros, which fell 7.31%, Interco Conexión Eléctrica SA (ISA), which fell 6.49%, Celsia 5.19% and some others from the construction sector”.
Punctual uploads
However, some stocks rose. Among these, the Nutresa group with 4.28%, the Canacol Energy oil company with 2.8% and the Suramericana investment group that rose 1.49%. Two remained at zero in their variation, the vast majority decreased, for an average of 4.48%.
On the other hand, according to Edgar Jiménez, coordinator of the financial laboratory of the Jorge Tadeo Lozano University, “this Wednesday’s market opened in relative calm, after a session of high volatility on Tuesday in Colombia, with a dollar still above of 4,000 pesos, but with a moderate downward trend. As the days go by we can see rates below 4,000 pesos”.
After the opening of the stock market calm is expected, perhaps with some valuations, opportunities, after the falls of the shares that occurred in the session on Tuesday, the analyst explained to the VOA.
He also highlighted that the international financial markets, particularly the Standard and Poor’s index in the United States, and Europe open with significant losses that may have an impact on Wednesday’s stock market session in Colombia.
nervousness will continue
The economic experts consulted by the VOA They maintain that in the course of the week the nervousness in the financial markets will continue due to the lack of information that defines who will be the helmsman of the new government in the Treasury portfolio.
Among investors there is nervousness “what can occur is a migration of foreign capital to countries like the United States, where the market is more attractive thanks to the fact that its Federal Reserve (FED) rose sharply 0.75%, interest rates ”, pointed out the economist from the Universidad de los Andes, Guillermo Rincón.
The financial market expects President Gustavo Petro to give a signal as to what the orientation of his economic policies will be and what will be the team that will accompany him on these issues.
Among the candidates to occupy this position are the economists Alejandro Gaviria, former rector of the Universidad de los Andes and former Minister of Health in the government of Juan Manuel Santos, and José Antonio Ocampo, former Minister of Finance; who Gustavo Petro himself announced during his campaign that he would be responsible for the economy in his government.
Ocampo was finance minister between 1996 and 1997 during the government of Ernesto Samper, he was also a professor at Columbia University and deputy secretary general for economic and social affairs of the Economic Commission for Latin America and the Caribbean (ECLAC).
Accelerate economic growth
According to Cesar Ferrari, an economist at the Javeriana University, Gustavo Petro’s challenge focuses on achieving a national pact that gives him governability, that allows him to promote policies that truly improve the well-being of the Colombian people.
“President Petro must increase taxes on people with higher incomes, national savings, investment and the competitiveness of companies. Could it be that he wants to do it? Could it be that he can?”
“To increase savings, it is necessary to reduce consumption. And to reduce the consumption of high-income people, taxes on luxury goods and services should be increased, as well as personal taxes on wealth and the dividends they receive as owners of companies, ”he stressed.
“To achieve this, it is also necessary to reduce expenditures or increase tax revenues. The first is almost impossible in a country where the State must cover as many needs as Colombia. However, the former is possible and desirable through the aforementioned taxes,” Ferrari said.
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