Colombia’s Colcap index dropped 0.71% Friday on weak volume of COP$134.7 billion. Ecopetrol, Cementos Argos and Bancolombia combined to drag the index down.
Nutresa reported strong earnings today as sales have increased 12.7% in the first half of the year over the same period in 2010, or 8.2% excluding recent acquisitions. Sales internationally rose 18.4% as they now make up 30.2% of total sales. Nonetheless, net income dropped 8.1% as margins compressed over the same period.
The Central Bank increased rates 25 basis points to bring the key rate to 4.50%. Inflation has been rising slowly but steadily and stood at 3.23% in June, still within the Bank’s target range of 3% +/- 1%, but enough to lead to the additional increase. No new measures were announced to manage the strong Peso, but they did increase their GDP estimates to 5.0% to 5.5% for 2011.
DANE announced June unemployment was down to 10.9% versus 11.6% the same period last year. Retail, restaurants and hotels were responsible for the largest gains in employment during the 2nd quarter.
Despite the confusion in the U.S., the Peso again closed weaker to the dollar finishing the session at 1,779.00.
Author Michael Sutton is head of International Trading at Bolsa y Renta.
