Sunrise Over El Dorado : Alianza : February 13th 2019

DAILY THOUGHT : Vehicles sales in Colombia got off to a very disappointing start with a decline of 2.9% YoY to 15,965 in January, especially after the increase of 30% which led the various federations to predict a strong year. Even more disappointing is that electric and hybrid cars sales whilst up 130.3% totaled just 76 or 0.47% of all vehicles sold - sadly they are still little more than gimmick amidst a society where the authorities are simply filing to get a grip on the environmental issues related to vehicles.

A recovery in volume (USD32mn) versus Monday and we had some upward mobility once again as the COLCAP rose 0.36% , closing @ 1473.73pts. The most traded stocks were: ECOPETROL (USD 9mn), PFBCOLOM (USD 3.5mn) and CORFICOLF (USD 2.5mn). In terms of movement MINEROS (+3.67%), ECOPETROL (+2.99%) and CONCONCRETO (+1.41%) all moved higher whilst ETB (-3.95%) ,PFAVH (-2.38%) and CLH (-1.83%) fell.

The PESO recovered from Monday's decline adding 0.4% to close at 3126.25 - volume on the day was USD1.27bn, overall we expect this direction to continue.

The Bond market recovered with the benchmark 2024 3bps lower at 6.01% whilst the 2032 fell 2.6bps to 7.064% - we do however see a continuation of the profit taking trend in the short term.

The country's largest carrier reported their latest passenger numbers for January and whilst numbers are up across the board it has to be remembered that in 2018 the airline was still recovering from the strike action therefore the 6.7% increase to 2.77mn total passengers is something of a false reading.

In terms of the split domestic traffic rose 6.4% to 1.56mn PAX whilst the more lucrative international routes saw increases of 7% to 1.12mn PAX. One area of concern will be the load factors which have fallen YoY from 85.5% to 83.6% - this could still be a hangover of packing passengers onto less planes in the aftermath of the strike due to a lack of pilots as opposed to a more worrying trend, only time will tell however in January 2017 it stood at 85.3%.

As the El Niño season continues we find reservoirs continuing to fall and electricity prices climbing although not yet to emergency levels. As of February 11th reservoirs stood at 55.45% dropping 0.31% from the previous day however unless the forecasters have got it badly wrong there should still be plenty of margin versus 2016 when on the same date we stood at 48.24%. In terms of prices February thus far has seen them rise to 292.44 kw/h from 272.35 kw/h in January but to give that real context a year ago they stood at 140.04 kw/h.