Sunrise Over El Dorado : Alianza : February 12th 2019

DAILY THOUGHT : In the latest Datexco opinion poll President Duque and his cabinet have seen an improvement in their approval levels, Duque has risen from 28-41% however is this down to the old favourite of external events shifting the focus or perhaps a shift to the right by those being polled considering that Donald Trump also saw his approval amongst Colombians increase from 28-34%. Overall people continue to frown on the handling of most aspects of the country however there perception is improving albeit off a low base - remarkably more people (16%) to day think the ELN are serious about peace than in December despite the horrifying bomb attack on the police barracks.

Volumes of USD15mn during a non holiday session are truly a concern - yesterday we totaled just that as the COLCAP dropped 0.02% , closing @ 1468.77pts, the only good news is that the direction in the auction was to the buy side. The most traded stocks were PFBCOLOM (USD 3.8mn), ECOPETROL (USD 3mn) and CEMARGOS (USD 1.5mn) whilst in terms of movement PFAVAL (+1.82%), PFGRUPOSURA (+1.20%) and PFGRUPOARGOS (USD 1.19%) moved ahead as MINEROS (-4.75%) ,PFCEMARGOS (-0.87%) and ECOPETROL (-0.87%) remained stuck in the mud. * The COLCAP is just starting to show signs of fatigue after an amazing January and if it is indeed to attack 1500 then heavyweights such as Bancolombia and Ecopetrol will have to make a move upwards *

The PESO was weaker during the first session of the week dropping 0.78% to 3138.85, on a day when the currency traded just over USD1bn. *This week in terms of strategy we are anticipating continued Peso strength until perhaps April with sub 3000 being a distinct possibility *

The Bond market had a weak day as profit taking appears to have broken out after such a good run. The 2024 dropped 3.2bps to 6.04% whilst the 2032 was 5.3bps weaker at 7.09%. * Last week the 2024 bond very much respected the 5.95% floor that we anticipated and we would continue to take profits all the way up to 6.52%*

The oil giant was back amongst the headlines yesterday as the Minister of Mining stated that decision as to whether to sell the 8.5% stake that is on the shelf would be taken before the end of the year, that of course leaves a lot of scope in terms of time line. The Minister over the coming months will meet with the President and FinMin in order to decide the best route to take - there will presumably be the usual discussion as they weigh up the immediate cash injection they would receive (approx USD3.3bn) versus the long term benefits of the dividend cheques. *Ten months is a long time and even if a decision is taken to go ahead there is the burning issue of who is going buy such a large amount of stock given the public's sector's reluctance to offer the sort of deep discounts which might attract foreign buyers*

The same Mining Minister announced that the Government was looking for national oil production to average between 890.000&y 910.000 bpb during 2019 which as the top end is a 5.2% increase - there were no details as to how this would be achieved and it looks a little ambitious. Furthermore the reserve statement for the country will be released over the next month.