Sunrise Over El Dorado : Alianza : January 14th 2019

DAILY THOUGHT : There is a saying that Colombians throw the house out of the window for Christmas - setting aside the physics these means they do like to consume around this time of the year. However according to the RADDAR study household spending actually moderated in December with YoY growth of 2.45% for the month versus a FY increase of 3.33%. Later this week we will have Retail Sales number but only for November so it will be a number of weeks more before we get a better picture of the December situation.

The COLCAP was looking at a flat day prior to the close but MOC orders pushed the index up 0.31% to give us a close of 1388.38pts, total volume on the day was USD42mn. There was heavy volume in PFBCOLOM (USD 11.5mn) as well as GRUPOSURA (USD 6mn) and ECOPETROL (USD 5.89mn). This gave the index an 8th consecutive positive session amid a promising start to the year helped in no small part by the drift towards emerging markets globally over recent weeks. In terms of the region in both local currency terms and dollar terms that puts the COLCAP around mid table very much alongside Chile at this point. We have risen 4.7% in Peso terms and moved above the 50 day SMAVG however we will need another 3.6% to get to the 100 day SMAVG - in between there is a lot of fresh air and fresh air rarely offers much support in times of crisis. The Peso was closed to unchanged on Friday closing at 3139 on healthy volume of USD1.14bn, with this the currency completed three weeks of gains.

The bond market got back on track on Friday after a weak session Thursday. This time we saw modest advances along the curve with the 2024 benchmark (6.12%) & 2032 (7.11%) gaining 2bps & 3bps respectively.

GRUPO EXITO

Some news out of Brazil this past Friday as GPA in Brazil reported 4Q operational numbers. SSS rose 6.9% (adjusting for calendar and new stores) which brings the FY number to a healthy 5.5% FY18. The main driver was Assai which rose 9.7% during Q4 (FY 8.1%) whilst Multivarejo grew 4.8% for the quarter and 3.6% during 2018.

TOURISM The ever longer tentacles of Nicolas Maduro and his despotic regime is leading to extra work and long hours at the Ministry of Tourism owing to the fact that they have had to carry a re-structure of their data due to the fact that most people coming over the eastern border are no longer in Colombia for the sunshine and good times, instead they are here seeking refuge. The Ministry has been forced to eliminate all Venezuelan migration data from August 2016 and replace them with an estimate of how many crossing the border are here for aforementioned vacations as opposed to escaping the land of the bus driver. The impact of this is dramatic however whilst it creates a hole in the growth numbers for 2017 and those estimated for 2018 they are still healthy enough. In 2016 the total drops from 5.09mn to 3.55mn lowering growth from 12-9% - moving on to 2017 the decline is even more dramatic down from 6.53mn-3.97mn, lowering growth from 28.3-12%. The estimate for 2018 using the new methodology is 4.38mn which represents an increase of 10.32% - not as dramatic as it might have been but still solid - the Ministry according to the press will make further announcements with regards to methodology over the coming weeks.