Colombia, at one point in time, was more known for drug trafficking rather than its economic prowess, but that reputation is slowly changing as the nation continues to post strong economic growth numbers.
The GDP data is even more impressive in light of the struggles the Western world has been experiencing.
The nation recorded annual GDP growth of between 4-6% in the 2010 to 2012 time period, and the IMF projects Colombia to post another solid growth figure of 4.4% in 2013.
Inflation, which South American countries have had an issue controlling in the past, has been tame as well, hovering in the 3% range since 2010 with 2.9% projected in 2013.
In one respect, Colombia is no different than other developing markets with a strong driver behind growth: natural resources, specifically oil and mining.
The oil industry has been driven by Ecopetrol (EC), the largest oil company in the country and one of the largest in the world with a market capitalization of over $110 billion.
With revenues more than doubling from just under $15 billion in 2009 to more than $30 billion in 2012, the numbers speak for themselves.
The market is recognizing the potential of Ecopetrol and has bid its American ADR’s to a price of $54 a share. Compared to the $20 price the shares were trading at the end of 2009. This is a significant share appreciation.
Unlike the oil industry, which is dominated by one large multinational, the mining industry is broken up into a lot of different sized companies spanning the whole globe.
AngloAshanti Gold (AU), a South African-based company, is one of the largest gold miners in the world and has seen enough potential in Colombia to establish a presence there. On the other side of the spectrum is Gran Colombia Gold, a Canadian-based company, which is a junior gold miner.
These are just two of the miners involved in the country but there are others such as B2Gold, Continental Gold, and Golden Glory Resources. Golden Glory Resources is interesting because it is owned by a small US company, Goff Corporation.
The company has one major gold project in Colombia, the La Frontera Property, located approximately 60 kilometers south of Medellin in the Aguadas Department, in Caldas, Colombia and is comprised of 1227 hectares of mineral leases.
The potential for gold is on the rise based on recent announcements from the company. The company said in late March that based on the samples gathered as part of the company’s initial exploration on its La Frontera Gold Project, they are confirming the mineralization type on the sampled areas and this may indicate excellent potential for a deeper, high grade gold source.
The aforementioned companies aren’t in Colombia just because of the company’s supply of natural resources but also because of the careful oversight of the economy by policymakers.
The IMF Executive Board noted as much in its 2012 Article IV Consultation with Colombia report. The Board said that the country has a “very strong” policy framework and “skillful” policy management.
The Board also commented that the financial health of Colombia’s credit institutions appears “sound.”
In addition to the IMF, private sector analysts and consultants are also bullish on Colombia. In fact, Americas Market Intelligence, Latin America’s leading market intelligence and advisory group, called Colombia one of the two rising stars of Latin American, along with Peru.
The agency also noted the country’s commitment to supporting market-friendly economic policies towards an expanding middle class.
Colombia is filled with potential across many industries and with policymakers making the country an attractive place for foreign investment, the future of the country is in good hands and on the right track.
forbes.com
The GDP data is even more impressive in light of the struggles the Western world has been experiencing.
The nation recorded annual GDP growth of between 4-6% in the 2010 to 2012 time period, and the IMF projects Colombia to post another solid growth figure of 4.4% in 2013.
Inflation, which South American countries have had an issue controlling in the past, has been tame as well, hovering in the 3% range since 2010 with 2.9% projected in 2013.
In one respect, Colombia is no different than other developing markets with a strong driver behind growth: natural resources, specifically oil and mining.
The oil industry has been driven by Ecopetrol (EC), the largest oil company in the country and one of the largest in the world with a market capitalization of over $110 billion.
With revenues more than doubling from just under $15 billion in 2009 to more than $30 billion in 2012, the numbers speak for themselves.
The market is recognizing the potential of Ecopetrol and has bid its American ADR’s to a price of $54 a share. Compared to the $20 price the shares were trading at the end of 2009. This is a significant share appreciation.
Unlike the oil industry, which is dominated by one large multinational, the mining industry is broken up into a lot of different sized companies spanning the whole globe.
AngloAshanti Gold (AU), a South African-based company, is one of the largest gold miners in the world and has seen enough potential in Colombia to establish a presence there. On the other side of the spectrum is Gran Colombia Gold, a Canadian-based company, which is a junior gold miner.
These are just two of the miners involved in the country but there are others such as B2Gold, Continental Gold, and Golden Glory Resources. Golden Glory Resources is interesting because it is owned by a small US company, Goff Corporation.
The company has one major gold project in Colombia, the La Frontera Property, located approximately 60 kilometers south of Medellin in the Aguadas Department, in Caldas, Colombia and is comprised of 1227 hectares of mineral leases.
The potential for gold is on the rise based on recent announcements from the company. The company said in late March that based on the samples gathered as part of the company’s initial exploration on its La Frontera Gold Project, they are confirming the mineralization type on the sampled areas and this may indicate excellent potential for a deeper, high grade gold source.
The aforementioned companies aren’t in Colombia just because of the company’s supply of natural resources but also because of the careful oversight of the economy by policymakers.
The IMF Executive Board noted as much in its 2012 Article IV Consultation with Colombia report. The Board said that the country has a “very strong” policy framework and “skillful” policy management.
The Board also commented that the financial health of Colombia’s credit institutions appears “sound.”
In addition to the IMF, private sector analysts and consultants are also bullish on Colombia. In fact, Americas Market Intelligence, Latin America’s leading market intelligence and advisory group, called Colombia one of the two rising stars of Latin American, along with Peru.
The agency also noted the country’s commitment to supporting market-friendly economic policies towards an expanding middle class.
Colombia is filled with potential across many industries and with policymakers making the country an attractive place for foreign investment, the future of the country is in good hands and on the right track.
forbes.com
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