Colombia Peso Weakens On Risk Aversion; Stocks Down

Fri, Aug 14 2009, 20:05 GMT
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Colombia Peso Weakens On Risk Aversion; Stocks Down

BOGOTA (Dow Jones)--The Colombian peso weakened 0.5% on Friday in tandem with other emerging-market currencies tracking the slump of U.S. markets.

The Colombian peso ended at 2,017 to the dollar from COP2,007.00 on Thursday amid a session that exchanged $1.48 billion, the third-highest daily trading volume so far this year.

U.S. stocks fell, wiping out most of major indexes' recent gains, following a weak reading on consumer sentiment. Most of the U.S. losses came after the release of the latest Reuters/University of Michigan index of consumer sentiment at 10 a.m. EDT. The measure fell to 63.2 in August from 66.0 in July. That was a stark disappointment compared to analysts' consensus expectation for a rise in the index to 68.5.

"This index reflects that U.S. people are fearful of losing their jobs. Others do not want to spend on fears of not having their jobs in the near future," said Jorge Zuniga, analyst at the Medellin-based brokerage Asesores en Valores.

The peso also weakened as local financial institutions and regular Colombians bought the dollar ahead of a holiday. Colombian markets and government offices will close on Monday for a holiday. On the equity market, the IGBC stock index fell 0.1% to 10,501.94 points.

The most-heavily traded stock was state-controlled power generator Isagen (ISAGEN.BO), which rose 1.3% to COP2,290 as the government readies the sale of its majority stake in the company. The second-most-heavily traded stock was state-controlled oil company Ecopetrol (ECOPETROL.BO), which fell 0.7% COP2,750 as investors sold shares because they already secured their dividends, Zuniga added.

Meanwhile, the yield on the benchmark local peso-denominated bond, known as TES maturing in 2020 ended at 9.127% from 9.089% on Thursday.

By Diana Delgado, Dow Jones Newswires; 57-1-6107044 Ext 1132 diana.delgado@dowjones.com

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END) Dow Jones Newswires
August 14, 2009 16:05 ET (20:05 GMT)
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