The MSCI Colcap index, a reference for the shares of companies most traded on the Colombian stock exchange, registers in this Tuesday’s session a drop of 5.89%, after last weekend Gustavo Petro will achieve victory in the elections presidential of the Latin American country.
After being closed for a holiday on Monday, the market has responded with a significant drop to the arrival of the new Colombian president. Specific, the index has lost 1,400 points in the early stages of tradingto stand at 1,368.9 integers.
Ecopetrol, the largest oil company in the country, leads the losses in the session, with a drop of over 11%. Likewise, companies such as Enka de Colombia (-9.09%), Corficolombiana (-8.84%), ISA (-7.88%) or Grupo Aval (-7.11%) are others with significant decreases in their prices .
Last Sunday, Petro emerged as the first left-wing president of Colombia, after defeating his opponent Rodolfo Hernández in the presidential elections. The new Congress will be installed on July 20 and the president-elect will take office on August 7 for a four-year term.
Among other economic measures, the candidate of the Historical Pact advocates leaving oil exploration activities behind, in order to move towards a green economy; reduce inequality in Colombian rural property, to put an end to productive large estates; and approve a new pension system in which the participation of the State is increased.
The manager of Vontobel AM, Thierry Larose, has pointed out that with this result it is expected that the country’s risk premium will appreciate more as a result of a result "supposedly unfavorable for the market".
For his part, Renzo Merino, an analyst at the credit agency Moody’s, has indicated that addressing issues such as inequality and poverty "can be positive for sovereign credit profile" of Colombia, to the extent that it makes it possible to reduce social tensions without notably affecting fiscal sustainability.
Merino has pointed out that the negative shocks that undermine investor confidence, which would impact economic growth, the fiscal consolidation process and the country’s credit prospects.
