Which Latin American market racked up the most equity offerings in the second half of 2011?

Not Brazil, the regional behometh, with seven deals worth $1.6bn, but Colombia, with seven fatter deals totaling $4.9bn, according to data compiled by Dealogic.

GrupoSura’s $1.8bn issue to fund its purchase of ING Group’s Latin American pension and insurance business was the single biggest deal, followed by state oil company Ecopetrol’s $1.3bn issue and retailer Almacenes Exito’s $1.3bn offering to fund international expansion.

While Brazil’s capital markets still clearly outgun the rest of Latin America – its 32 equity offerings for the full year were worth about $11.3bn, almost double Colombia’s share – Colombia is the market that bankers from UBS to Itau BBA are most excited about.

“Colombia is reaching significant levels of growth since the establishment of political stability, as well as having adopted the macroeconomic ‘tripod’ of setting and policing inflation goals with low interest rates, floating exchange rates, and fiscal responsibility,” said Alberto Fernandes, Itau’s vice-president, recently.

The bank has been building up its presence in the Andean country, encouraged by its strong economic growth – forecast at 4.3 per cent in 2012.

Stripping Brazil out from the regional picture, Colombia’s performance in equity offerings is even more impressive. Its nine deals for the full year 2011 totalled $6.5bn, surpassing Chile (16 deals worth $5.7bn), Mexico (seven deals worth $3.2bn), Argentina (seven deals worth $4.8bn) and Peru (one $45m deal).

Prudent economic management, an independent central bank with a weather eye on inflation, and a healthy financial system are other factors weighing in Colombia’s favour.

Julian Marquez, of Interbolsa, Colombia’s biggest brokerage, says many mining or energy companies in particular are poised to follow the lead of Toronto-based oil and gas company Pacific Rubiales and list locally in the short- to medium- term.

Pacific Rubiales, which became Colombia’s biggest independent oil producer by exploiting the long-neglected Rubiales field, listed locally in late 2009.

“The upside you can find in Colombia is quite difficult to find in more developed markets like Mexico or Chile,” says Julian Marquez, of Interbolsa, Colombia’s biggest brokerage.

“It’s a country that can offer investors liquidity, and the rules of the game are very clear… the financial system is well-balanced and largely Colombian-owned. There is no financial risk in the local economy.”

Colombia’s security gains are still imperfect – organized crime groups have risen in the wake of demobilised paramilitaries and the leftist Revolutionary Armed Forces of Colombia still control territory and have the capacity to kidnap workers or damage infrastructure – but police and military forces have opened up huge new tracts of land for mining, oil and gas exploration outfits.

While Mila, the cross-trading platform that links the Colombian, Chilean, Peruvian (and possibly soon the Mexican) exchanges has got off to a slow start, it has woken up new foreign investors to the potential of the Andean region, and will likely be a factor in encouraging more local IPOs.

“We thought 2012 was going to be the year we started with a low oil price due to the European crisis,” says Marquez. “But the problems in the Middle East have bolstered prices and Colombia is a country that’s increasing its oil production by double digit figures. And it’s far away from those troubles.”