Colombia’s equity market is the one bright spot in Latin America in an otherwise disappointing year for the region so far. And the pipeline remains strong.
Energy company Empresa de Energía de Bogotá, retailer Almacenes Éxito and financial services provider Grupo Suramericana are all rumoured to be considering issuances over the next 12 months, market volatility notwithstanding.
Local bank Davivienda, which undertook a Ps416 billion [$230 million] IPO last August, is also understood to be considering issuing a follow-on. If they go through, these transactions could raise as much as $500 million.
A Ps522.5 billion follow-on deal for Nutresa in mid-July showed that the market remains open. The food company has stated it would consider an acquisition in Latin America or the US.
Local investors have dominated recent order books, with retail accounts particularly active. Angela Hernandez, head of research at Corredores e Asociados, says that retail investors account for almost 40% of stock market participation. Recently observed impressive bid-to-cover ratios indicate high levels of demand from the local retail sector, with Nutresa 18 times oversubscribed; Davivienda and construction company Conconcreto 13 times; airline group Avianca-Taca six times; and financial company Grupo Aval three times.
