COLOMBIA: Duque's Candidacy Can Boost The Market But With Caution

(RTTNews) - The victory of the right-wing senator Iván Duque in the primary polls of the Democratic Center, defining him as the coalition's candidate for Colombia's Presidency, and the winning of the former president Álvaro Uribe, who backs Duque, in yesterday's legislative elections can lead markets up, although the expected rally could be tempered by concerns about what the future President will do with the current peace agreement with the former Revolutionary Armed Forces of Colombia (FARC) guerrilla group, said Capital Economics analysts in a report.

The report notes that the Democratic Center has the best chance to build a functioning coalition in Congress, given that the party secured the largest number of seats, and right-wing parties secured a total of about two-thirds of the seats.

As a result, according to Capital Economics' assessment, Duque may be the favorite for the presidential elections in May. The candidate probably would get enough support to implement his economic policies favorable to the market.

"Our best guess is that the implementation of the current peace agreement would be (even) slower under Duque's presidency. That said, the uncertainty surrounding the future of the peace agreement could be enough to moderate any recovery in financial markets if Duque's rise in the polls continues in the coming weeks," analysts said.

In the latest opinion polls, Duque trails the leftist candidate Gustavo Petro within the margin of error.