Colombia Stk Index Falls As Investors Sell To Buy Ecopetrol

BOGOTA (Dow Jones)--The Colombian stock index fell as investors are selling shares to buy into state-owned oil company Ecopetrol SA.

The IGBC stock index fell 1.6% to 10,429.67 points, its lowest level since Aug. 22. So far this year, the stock index is down 6.6%.

Colombian investors are selling shares to get cash to buy shares in Ecopetrol, the country's largest privatization ever, said David Rivera, a market analyst with local brokerage Asesores en Valores.

"People are enthusiastic about Ecopetrol, and they're selling other shares, which have performed poorly so far this year," Rivera said.

The government started to sell a 10.1% stake in Ecopetrol on Aug. 27. Institutional and retail investors can buy shares through bank branches, brokerages and even supermarkets.

Additionally, investors are anticipating a rate increase by the central bank's board at its next monetary meeting on Sept. 21, Rivera said.

"Banks would be the first to suffer from higher rates," Rivera said.

The preferred shares of Colombia's largest bank, Bancolombia SA (BCOLOMBIA.BO), fell 2.6% to 16,560 Colombian pesos ($7.77), while its ordinary shares fell 1.7% to COP16,360.

Financial holding company Suramericana de Inversiones SA (SURAMINV.BO), which controls Bancolombia, fell 1.6% to COP18,360.

On the currency market, the Colombian peso strengthened to COP2,130 against the dollar from COP2,141.45 the previous day.

Meanwhile, the yield on the benchmark government peso-denominated bond maturing in 2020 fell to 10.295% from 10.43% on Thursday.

-By Inti Landauro, Dow Jones Newswires; 57-310-867 65 42; colombia@dowjones.com

(END) Dow Jones Newswires