Confidence in the Colombian industrial sector wanes
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The latest Business Survey from Fedesarollo in Colombia, showed that confidence in the industrial sector continues to be low. The business confidence indicator though, maintains the slight tendency towards recovery observed in the previous survey.
The results overall were mixed. The construction sector indicated that while the business environment has improved, it is still below those a year ago. The index on economic and sociopolitical conditions for investment is showing a downward trend that seems to be losing steam, though it is very close to fall in negative territory. The installed capacity utilization, a quarterly metric, was 70%, the highest this year but lower than in August 2011. All these factors point to a possible inflection point in the economy.
This survey is a key datapoint for investors in Global X InterBolsa FTSE Colombia 20 ETF (GXG). Given the uncertainty around the direction, investors willing to play the market could start accumulating positions in GXG and remain close to the sidelines in case anything changes. For broader Latin American exposure, it may be wiser to look at ETFs like ILF, the iShares S&P Latin America ETF, as well as emerging market ETFs like EEM and VWO.