Bancolombia SA, Colombia’s largest bank, rose the most in a month as Deutsche Bank AG raised its rating to hold, saying the company may seek to sell less than the $2.3 billion in stock approved by shareholders.
Preferred shares climbed 0.9 percent to 28,740 pesos at 2:13 p.m. in Bogota after climbing as much as 2.1 percent in the biggest intraday jump since Feb. 25.
Bancolombia has dropped 6.3 percent since agreeing on Feb. 19 to pay $2.1 billion for HSBC Holdings Plc’s Panama unit as investors speculated the bank will sell shares to preserve its capital ratios. Shareholders voted on March 4 to allow the sale of as many as 148.2 million preferred shares that may be issued in multiple offerings. That was worth 4.3 trillion pesos ($2.3 billion) today.
“We expect the company to issue less than the entire amount,” Tito Labarta and Mario Pierry, analysts at Deutsche Bank, wrote in a research note published yesterday. Bancolombia’s American Depositary Receipts were raised to hold from sell.
Bancolombia may rally 15 percent if no shares shares are issued, according to the analysts, “which likely explains why management may choose to delay the offering as long as possible.” The stock may fall 8 percent if Bancolombia sold the full amount, they wrote.