The week began with the most awaited news for the Latin American market: the presidential runoff in Colombia. The winner was the leftist candidate Gustavo Petro, who won a majority with 50.40% of the votes vs. 47.2%. 50.40% of the votes vs. 47.2% for his rival Rodolfo Hernandez. of his rival Rodolfo Hernandez. We had to wait until Tuesday to see the market reactions to this negative news for them, and the consequences came to lightThe Colombian peso depreciated 4.90%, reaching 4,000 pesos per dollar (an important psychological barrier), sovereign bonds at 2031 fell 2 cents on the dollar, and Ecopetrol bonds at 2031 fell 3 cents on the dollar, reaching a historic low of 75.50 cents per dollar.

However, the market scare lasted only a couple of hours, the market scare lasted only a couple of hours, however, because as ColombianAs Colombian risk assets touched attractive levels, we saw several brokers taking this as a buying opportunity after the news was better digested, convinced that Petro would have very little chance of passing many of his measures, as well as appointing a minister of state.and appointing a pro-market Minister of Finance. pro-market finance ministerand being more emphatic in his pre second round speech about giving more tranquility to the private sector.

As a result, the market has calmed down and has dispelled the main fears it had after Petro's election. For example, for example, the corporate spread of the CEMBI IG index in Colombia has had no negative variations at the close since the news and a credit spread remains at 325 basis points, while the CEMBI HY Colombia index is at 537 basis points.. In terms of total return, the change has been almost zero since Tuesday's closing prices (both indices returning +0.1% at the close of this report). It remains to be seen if the market continues to give this "confidence" to the new Colombian president in the coming days..

Adolfo Erpel

Money Desk Equipment