Thursday , May 13 2021

Shares of Grupo Aval may recover up to 102%, according to Commission agents

Analysts rely on the recovery of the banking sector

Andrés Venegas Loaiza – [email protected]

At the end of the week, the news in the financial sector was Asobancaria's President Santiago Castro's call to stop what he calls a "panic of economic panic" in which investors are invited to sell shares they have in some financial groups, such as is speculating with a predictable catastrophe in the stock market.

The official's call comes at a time when the problem of the Aval Group (the largest banking group in the country) in the Odebrecht case has caused their stock to fall on the stock market.

LR, however, had the task of examining the forecasts of the types by group and other banking sectors of the financial analysts by finding that none of these actions had any negative expectations beyond reputational noise and that, on the contrary, as banks are expected to have good air in 2019

In summary, the shares of Grupo Aval are the species that analysts have given the most weight at their target price; so that the preferential share of Corficolombiana, the main one affected by the scandals, could reach 102% of its current price, whereas the normal share could recover to 91.2%; such as those with better projection.

Alexandra Silly, analyst of Valores y Valores shares, commented that "it is very true that the topic of economic panic was created with the expectation that the market is about the Aval group," but she said she had better financial results and that companies are strong because of their foundations, so these and others in the banking sector "are perceived in the medium term as a great opportunity."

Asked whether this fall faced by the group's actions could lead to contagion in the sector, Carlos Rodriguez, director of the Ultraserfinco Fund, said that "there are always rumors and gossip on the market, but the reality is that banks today they are well positioned in the past as well as in the capitalization levels. "

The analyst added that in the particular case of Grupo Aval the foundations were stronger than the noise, noting that "the problem with Ruta del Sol has been in Colombia for more than two years, and what we see in the results of Aval companies is that the foundations prevail over the media risk ".

Ómar Suárez, a shareholder of Casa de Bolsa, stressed that 2018 is a year of delays in the portfolio, "a situation that degrades the quality and increases the cost of provisions that have affected ROE and net bank profits," but without the expert yet predicting by 2019 there are signs of improvement in these factors.

Just in the last monthly report revealed by financial supervision, it was shown that banks are recovering and eight out of ten of them have increased their profits compared to 2017.

"We recommend the next year's banking sector be supported by a faster growth in the portfolio, which could reach 8%, and the decline in the portfolio with overdue, as the exit of some of the major customers like Electricaribe would make utilities improve, Rodriguez confirmed.

On the other hand, Cely says that "despite the noises, a negative recommendation is not done precisely because they are reputable, not their basics, which are strong."

The Aval Group is a major shareholder and holder of Banco Popular, with a 93.70% stake; Banco Av Villas, owned by 79.90%; Banco de Occidente, with a share of 72.30%; Bank Bogota, where there are 68.70%; and Porvenir, where there is 20% participation. Corficolombiana Corporation is a subsidiary of Banco de Bogotá, which owns 32.93% of its stake.


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