martes, 10 de mayo de 2011

Colombia Yields Fall to Four-Month Low on Inflation Outlook.



Fuente: Bloomberg.

Colombia’s bonds rose, pushing yields to their lowest level in four months, after April inflation trailed forecasts and as investors stepped up bets that proceeds from government securities maturing this month will be reinvested in debt.

The yield on the nation’s 10 percent bonds due July 2024 fell six basis points, or 0.06 percentage points, to 8.18 percent at 2:15 p.m. New York time, according to Colombia’s stock exchange. That’s the lowest since Jan. 13. The bond’s price climbed 0.528 centavo to 114.315 centavos per peso.

“Inflation is a clear driver in the trend” for lower yields, said Francisco Chaves, an analyst at Bogota-based brokerage Corredores Asociados SA. “Expectations of the liquidity that will come from payments for maturing debt is also helping.”

Colombia’s annual inflation slowed to 2.84 percent in April from the same month a year earlier, lower than the 3.08 percent median forecast among analysts surveyed by Bloomberg.

About 10 trillion pesos ($5.6 billion) of peso bonds, known as TES, are maturing this month. Finance Minister Juan Carlos Echeverry has said the government will use funds it is keeping in the central bank to pay for securities coming due in May.

“There is a good environment to invest in TES,” said Chaves who predicts the yield on the benchmark bonds due in July 2024 will fall to 8 percent this month.

Peso Weakens

The peso erased earlier declines, gaining 0.1 percent to 1,787.10 per U.S. dollar from 1,787.98 yesterday. The peso is up 6.8 percent this year, the best performance among six Latin American currencies tracked by Bloomberg.

The local currency earlier fell as much as 0.5 percent amid speculation the government is buying dollars in the spot market, according to Chaves.

In a bid to ease gains in the peso, Echeverry on April 29 announced that the government would create an overseas fund with as much as $1.2 billion from dollars bought in the local spot market through the end of 2011, and would forgo repatriating funds from abroad for the rest of the year. That comes on top of the central bank’s plans to buy a minimum of $20 million daily until at least June 17.

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