Colombian Markets Maintain Strength Approaching 2025 Year-End

Key Points

• The Colombian peso strengthened markedly in 2025, with USD/COP falling around 13-16% year-to-date amid broader emerging market resilience and stable commodity exports.
• Colombia’s MSCI COLCAP index achieved multi-year highs, reflecting improved investor confidence in financial sector recovery and attractive valuations.
• Amid fiscal challenges, including a declared economic emergency to address deficits, markets displayed notable stability entering the holiday period.

The Colombian peso continued its robust appreciation against the U.S. dollar approaching the end of 2025, trading near 3,756-3,759 pesos per dollar on December 24 morning.

This followed a modest decline from the previous session’s levels around 3,792-3,798, extending a year-to-date trend where the peso gained approximately 13-16% versus the dollar.

The U.S. Dollar Index (DXY) lingered near multi-month lows around 97.88-98.03, undermined by expectations of further Federal Reserve adjustments and diminished global dollar demand.

Fundamentally, the peso benefited from steady oil prices—a vital export—strong remittances, and positive sentiment toward emerging markets.

Technical indicators on shorter timeframes, such as the 4-hour chart, showed a descending channel with downward-aligned moving averages, while daily charts confirmed a prolonged downtrend from mid-year highs above 4,200.

Comparisons across timeframes pointed to sustained near-term strength, though low holiday volumes tempered activity.

Parallel developments buoyed the equity market, where the MSCI COLCAP index reached multi-year peaks above 2,000 points earlier in the year, driven by financial sector gains and reasonable valuations around 1.26x price-to-book.

Despite subdued trading ahead of Christmas—markets operating on reduced hours or closed—the index maintained constructive consolidation within an uptrend, supported by macroeconomic stability and controlled inflation.

Top Winners (2025 Performers):

1. Financial sector stocks (e.g., leading banks) – Benefited from portfolio recovery.
2. Ecopetrol – Supported by resilient oil prices.
3. Grupo Sura – Strong earnings growth.
4. Preferred shares in utilities – Attractive dividends.
5. Construction-related firms – Healthier sector outlook.

Top Losers (2025 Underperformers):

1. Certain consumer discretionary names – Pressured by spending caution.
2. Exited index components (e.g., ETB, Canacol) – Reduced liquidity impact.
3. High-debt issuers – Fiscal uncertainty drag.
4. Import-heavy industrials – Peso strength effects.
5. Smaller caps outside COLCAP – Lower investor focus.

While fiscal pressures persisted, including debates over deficits and emergency measures under the current administration, market resilience highlighted underlying economic fundamentals and prudent private sector dynamics as the holiday season progressed.

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