Ecopetrol SA fell for a second day, touching its lowest level in seven weeks, after government officials sent mixed signals as to how Colombia will invest the proceeds from the sale of its 9.9 percent stake in the state oil company.
President Juan Manuel Santos said yesterday Colombia would use the money for infrastructure projects including roads. Finance Minister Juan Carlos Echeverry said in an interview today with Caracol Radio that such a plan is “not imminent” and that Ecopetrol’s plans to use the proceeds for investment remain.
The conflicting information pushed down Ecopetrol’s stock 4.4 percent in the past two days. After markets closed, Ecopetrol said in a regulatory filing that the government plans to sell part of its stake in the company in the secondary market and is free to use the money in any way.
“The market is very nervous about this,” Jose Fernando Restrepo, head of research at Interbolsa SA, the country’s biggest brokerage said in a phone interview before Ecopetrol issued the statement. “There is little understanding of what’s going on. The government needs to make much clearer what it is planning and, if they don’t, the market will continue to decline.”
Ecopetrol, based in Bogota, dropped 2.1 percent at 3:09 p.m. New York time. Earlier, the shares fell as much as 5.5 percent to the lowest price since Oct. 5.
The capitalization of Ecopetrol is defined as a new share issuance and “oriented exclusively toward obtaining resources for the company, while an eventual sale of shares owned by the nation will be used in the way the government determines,” Ecopetrol said in the filing. The two processes are “harmonious and complementary” and can be carried out for the benefit of the country and shareholders, the company said.
“We’re not going to come out and sell in the short-term,” Echeverry told Caracol Radio. “This is something we’re developing. I want to calm the market. We’re not going to rush out and sell.”