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(Bloomberg) — Abu Dhabi’s $800 billion sovereign wealth fund led sales of Colombia’s local government bonds in a volatile October, as the country’s debt and currency tumbled.
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Canadian pension fund manager Caisse de depot et placement du Quebec also gave up some of its holdings as the Andean country saw its first net outflow from foreign fund managers in 11 months.
Meanwhile, Singapore and Norway, the top holders of bonds, both increased their positions during the period.
Abu Dhabi Investment Authority and Quebec Savings Bank sold a combined 1.38 trillion pesos ($288 million) of securities in October, according to data from the Auditor General’s Office. This month, foreign funds sold a net 1.51 trillion pesos of bonds, or TES.
Some investors have been on edge since the election of Gustavo Petro in June, and have been worried by his pledges to phase out the fossil fuel industries which account for about half of Colombia’s exports. His criticism of the central bank, and his suggestion in tweets The tweet that capital controls are preferable to tighter monetary policy also made some fund managers nervous.
Read more: Colombian policy U-turn piles up under left-wing leader
Even so, foreign investors were net buyers of 21.5 trillion pesos of TES in the year to October, surpassing local pension funds as the largest overall holder. Foreign funds currently account for about 26.6% of the total.
top holder
The Singapore government and central bank are the largest holders of TES, holding about 11 trillion pesos, with an increase of about 49 billion pesos. Norges Bank, which manages Norway’s sovereign wealth fund, was the biggest buyer of TES this month, adding 425 billion pesos. Dutch fund manager Stichting Pensioenfonds ABP also increased its TES holdings by P212 billion.
Funds managed by Ashmore Group, Citigroup Inc., Legg Mason Inc. and BlackRock Inc. are net sellers, while Vanguard Group Inc. is a net buyer.
Volatility in Colombian markets in recent weeks has seen yields on TES due in 2031 rise to more than 15% in October from less than 8% a year ago. The securities have since recovered and are now yielding around 13.5%.
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