Colombia’s Election of Risk
Few events have more impact on Investor’s risk perception than presidential elections. This hypothesis was once again tested with the successful completion of the runoff elections in Colombia, celebrated this past Sunday, June 19, 2022. The result was a victory for Gustavo Petro, seen by political analysts as an anti-establishment politician with a progressive agenda. During the final days of the campaign, it became increasingly clear to many investors and analysts that Gustavo Petro would win the election. This led to doubts over the economic future of the country and a subsequent outflow of capital from investors just prior and continued after the official announcement. This has in turn weakened the Colombian currency (COP) which has depreciated 5% in the aftermath of the elections. Spreads for the 5yr Colombian CDS have increased by 35% month-to-date. While the iShares MSCI Colombia ETF ($ICOL) has lost 25% of its value during the same time and is heading for the worst monthly performance for this ETF in over 2 years.
Data provided by Solve Advisors Inc
Related Resources
About SOLVE
SOLVE is the leading market data platform provider for fixed-income securities, trusted by sophisticated buy-side and sell-side firms worldwide. Founded in 2011, SOLVE leverages its AI-driven technology and deep industry expertise to offer unparalleled transparency into markets, reduce risk, and save hundreds of hours across front-office workflows. With the largest real-time datasets for Securitized Products, Municipal Bonds, Corporate Bonds, Syndicated Bank Loans, Convertible Bonds, CDS, and Private Credit, SOLVE empowers clients to transform the way they bring new securities to market, trade on secondary markets, and value highly illiquid securities. Headquartered in Connecticut, with offices across the globe, SOLVE is the definitive source for market pricing in fixed-income markets.
