Colombia’s Fabricato Holds at Five-Year High on Chavez.

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Fabricato SA, Colombia’s biggest textile maker, held at a five-year high on speculation Venezuelan President Hugo Chavez may step down from office, helping the two countries strengthen trade agreements.

Fabricato held at 69.5 pesos, its highest level since February 2006, after it rose by as much as 5 percent earlier.

Investors are betting that a new president may take office before next year’s elections or that Chavez may be defeated in that vote as he battles cancer, said Rupert Stebbings, Colombia director for Celfin Capital.

“There’s no question at all that in a post-Chavez scenario in which Venezuela returns to normality, there’s a huge upside for the recovery of capital,” Stebbings said in a phone interview from Medellin. “Exports to Venezuela used to be huge, but now basically don’t exist under Chavez.”

Colombian President Juan Manuel Santos and Chavez restored ties last year after Chavez sent tanks to the border in 2009 in a dispute over Colombian accusations that Venezuela was harboring Marxist rebels. Colombia’s cross-border trade with Venezuela plunged 65 percent to $1.4 billion last year from 2009, according to Colombia’s statistics agency.

Chavez said in a speech in Caracas yesterday that he has “started to beat” the cancer. Nicolas Maduro, Venezuela’s foreign minister, said in a July 2 interview on the Televen network that Chavez will seek re-election next year.

Changes

Chavez is to announce changes to his Cabinet today, replacing Vice President Elias Jaua with Foreign Minister Nicolas Maduro and Defense Minister Carlos Mata Figueroa with General-in-Chief Henry Rangel Silva, El Mundo reported, citing unnamed government officials.

Colombia and Venezuela are to set a timetable this month for negotiations aimed at seeking a bilateral trade accord after Venezuelan debts with Colombian exporters, which were aggravated by the trade freeze, were paid down to $250 million, Colombia trade minister Sergio Diaz-Granados told the daily Portafolio July 4.

Fabricato, which has a Venezuelan affiliate, Fabritexca, sent as much as 20 percent of its exports to Venezuela before the diplomatic crisis, according to a source in the company who couldn’t be named because of company policy. Fabritexca reported no first-quarter profit, according to a regulatory filing.

Bloomberg.