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Daily Colombian Equities Bulletin and Fundamentals 3-21-14

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March 21, 2014 (www.investorideas.com newswire) Latam markets were positive as Bovespa in Brazil increased 1.53% and Chilean IPSA index increased 0.47%. The local COLCAP index closed at 1608.99 pts., equivalent to a 0.87% increase; the total traded volume reached COP 126,667 million (~64 USD MM). The best performers were ETB (+5.62%), Exito (+3.19%) and Cemex Latam (+3.18%). On the other hand, the worst performers were Enka (-3.07%), Canacol (-2.77%) and Mineros (-1.31%). The most traded shares today were Ecopetrol, PfBancolombia and Pacific Rubiales.

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Carlos Ignacio Gallego was named as the new President of Grupo Nutresa, replacing Carlos Enrique Piedrahita. Gallego has more than 25 years of experience, of which 20 have been in the company in different areas. He was president of Nutresa Services, director of Nutresa Foundation and is the current president of the Chocolate business. He will be assuming his new role starting on April first. We see this as positive for the company assuming that Gallego will maintain the same strategy as former Piedrahita, which differentiated from the other companies of the Group Antioqueño GEA, which was highly valued by the market in terms of the independency they showed.

The General Assembly of Grupo Éxito approved the distribution of an annual dividend of COP 531/share (COP 132.75 quarterly). The quarterly dividend will be payed on april-14, july-14, October-14 and January-15, and corresponds to a yield of 1.9%.

Codensa's Board approved an increase of COP 165 billion in the authorized amount of the local bond program for a total of COP 950 million. The Board also approved the modifications to the rules of issuance and placement of bonds under the program, to reflect the increase in the amount. In the same way, Emgesa's Board approved the increase of COP 804,515 million in the amount of total indebtedness of the company to a total of COP 4.2 billion. Both companies are subsidiaries of the Grupo de Energia de Bogota (EEB).

The General Assembly of Mineros S.A. approved the distribution of a monthly dividend of COP 10/share between April 2014 and March 2015, equivalent to a dividend yield of 4%.

Yesterday, JPMorgan announced a change in the allocation of Colombia TES bonds within the GBI-EM, its flagship local-currency government bond index. The firm announced an indicative weight increase of COP-denominated bonds to 8.0% from 3.2% as of 28 February 2014 for its Global Diversified version and 5.6% from 1.8% for its Global version. These changes are expected to take place between March 30 2014 and September 30 2014. This helped the local debt and the currency to return to levels not seen since 2013, despite FEDs new worries generated from Yellens comments yesterday.

Colombia's 4Q13 GDP growth rate was 4.9% YoY, higher from both, our expectations and the market consensus (4.7% YoY) and equivalent to a 2013 GDP growth rate of 4.3% YoY (4.2% in 2012). The Colombian Central Bank expected a 4.6% growth in 4Q13, while the government expected a higher figure (5.1% YoY). The market is now expecting an increase in the reference rate sooner, probably in May. We believe the CB will need more information before they start the new tightening cycle, and keep our estimate of Repo Rate by year end in 3.75%. This should be good for equities, specially for consumer related ones and infraestructure.

After the dismissal of Bogota's Major Gustavo Petro, the Colombia´s Government appointed the labor Minister, Rafael Pardo Rueda, as acting Major of the city. The dismissal has a positive impact on ETB's and EEB's stocks today, increasing 5.6% and 2.3%, respectively.

International News

In the US, markets were positive as the S&P 500 increased 0.60% and the DJIA increased 0.67%.

The initial jobless claims in the US for the week ending on March 15 were 320K, lower than expected by analysts (322K) but higher than the figure of the week ending on March 7 (315K). The Conference Board US Leading Index registered a positive surprise closing in 0.5% on February, higher than expected by analysts (0.2%) and the revised figure of January (0.1%).

RESEARCH & STRATEGY

Corredores Asociados S.A. Comisionista de Bolsa is not responsible for investment decisions that may be derived from the information and analyses presented in this document. These decisions, their effects and consequences will be the sole responsibility of the investor. The information published is informative and has been taken from reliable sources, but Corredores Asociados S.A. does not guarantee that they are free of errors. Total or partial reproduction of this document is not allowed without the prior and express authorization of Corredores Asociados S.A.

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