FIXED INCOME

Colombia 2018 | FINANCE | COLUMN

TBY talks to Luis Miguel González, President Credicorp, Capital Colombia, on the sector.

Luis Miguel González

How do you work on growing and become stronger both locally and regionally?

Colombia's weight in the emerging markets index (MSCI) does not even reach 0.5%, and there is much to be done to attract investors to make the region more relevant. Peru, Colombia, and Chile represent 1.5% of the index, making the region more attractive. If we include Mexico, the percentage rises to 3%. More importantly, the tax treatment for foreign investment should be more friendly and homogeneous among the different economies. Our leading role in the market demands us to encourage agents to have these issues on their agenda.

Have your clients' profiles changed in the face of developments in the country?

Local investors tend to overreact easily. Before 2012, local retail investors made up over 50% of the traded volume in variable income; today, that figure is 10%, which shows their loss of confidence in the profitability of the market. On the other side, there has been an increase in foreign investment, not only in variable income but also fixed income. Today, they are perhaps the main holders of the local public debt. There is confidence, and the devaluation has created excellent opportunities for foreign investors to pursue.