IGBC Takes A Hit, But View Remains In Play

The past week has once again demonstrated that Colombian stocks are not for the fainthearted, as the benchmark IGBC equity index fell 5.9% straight after hitting a two-month peak at 15,445 on March 7. Yet this was not a broad-based decline in the market, and can in large part be attributed to the post-earnings slump of Canada-based Pacific Rubiales, which carries a 22.8% weighting on the bourse. Indeed, as 2010 income results came in below consensus estimates, the energy company's share price fell a whopping 9.1% on March 11 alone. With other sectors and companies holding up, we do not believe that this idiosyncratic move warrants a fundamental reassessment of our neutral-to-bullish view on the index for 2011.

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