| MEDELLIN, Colombia
MEDELLIN, Colombia Colombia's capital markets have attracted investment totaling $2.8 billion in the seven weeks since J.P. Morgan said it would raise the weighting of the nation's government bonds in two of its indexes, one of the bank's strategists said on Thursday.
The heavier weighting of Colombian debt in its GBI-EM Global Diversified and GBI-EM Global indexes begins on May 30 for four months. After September 30, the weightings could be modified again.
Colombia is finding favor with investors with steady economic growth coupled with low inflation and market-friendly governance.
The investment bank has calculated that its decision will imply inflows of $9.4 billion into Colombia's financial markets, though other analysts' views vary widely from $4 billion to $10 billion.
"There has already been $2.8 billion that has come in, so you could say there's a little more than $6 billion still to come," said Luis Oganes, J.P. Morgan's global head of research for emerging markets, during a bankers' forum in Colombia's second-biggest city, Medellin.
Some the impact on the currency would be offset by investors covering their risk with other asset purchases, Oganes said.
"This doesn't mean that there will be this kind of heavy upward pressure because it's highly likely that foreign investors will decide to cover their foreign exchange risk, meaning the net inflow of dollars to the economy will be less," he said.
The Andean nation's peso strengthened on Wednesday to 1,898 to the dollar, its strongest since October. The currency has strengthened 6 percent since J.P. Morgan's March 19 announcement.
(Writing by Peter Murphy; Editing by Chizu Nomiyama)