Colombia Stk Index Ends Above 11,000 Points, Highest In 2 Yrs

Fri, Sep 25 2009, 22:47 GMT
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Colombia Stk Index Ends Above 11,000 Points, Highest In 2 Yrs

BOGOTA (Dow Jones)--The Colombian benchmark stock index Friday ended above 11,000 points for the first time in almost two years as there is an increasing appetite for local stocks.

The IGBC rose 1.1% to 11,078.43 points. The index hadn't closed that high since Nov. 30, 2007.

"There is an excess of liquidity in the local market and the returns on fixed income is so low that people prefer to buy stocks," Felipe Campos, a market analyst with local brokerage Alianza Valores, said.

He added there is optimism about the crisis that wasn't as severe as originally feared and the recovery seems under way, he said.

On Thursday the Colombian statistics department said the country's gross domestic product contracted 0.5% in the second quarter compared with the same period in 2008, but expanded 0.7% compared with the previous quarter. Analysts and government officials have said the data show a recovery is slowly starting.

Campos said the index will likely surpass its all-time record of 11,433.26 points hit in January 2005 and will end the year between 12,500 points and 13,000 points.

Shares of state-controlled telephone company Empresa de Telecomuniaciones de Bogota SA (ETB.BO) rose 2.3% to 1,105 Colombian pesos ($0.57), while shares of state-controlled oil company Ecopetrol SA (ECOPETROL.BO) gained 0.9% to COP2,695.

On the currency market, the peso strengthened to COP1,924 to the dollar from COP1,928.1 on Thursday and on the debt market, the yield on the peso-denominated government bond maturing in 2020 ended at 9.132% from 9.14% on Thursday.

By Inti Landauro, Dow Jones Newswires; 57-1-610 70 44 Ext. 1131; colombia@dowjones.com

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September 25, 2009 18:47 ET (22:47 GMT)