FX.co ★ Colgate and Avon shares fell amid Venezuela devaluation

The shares of the U.S. corporations producing consumer goods fell on February 8, 2013 after the Venezuelan government announced a devaluation of the bolivar.
The world’s largest manufacturers of household goods have a large share of their retail sales volume in Venezuela.
Thus, the shares of Colgate-Palmolive, best known for its namesake toothpaste, were down 1.5 percent at the close of trading, while Avon Products’ securities fell 2.5%.
The shares of Energizer Holdings, American batteries maker, closed in the red together with Kimberly-Clark Corp that is engaged in manufacturing of home care and hygiene products. Venezuelan market contributes 5.1% to Colgate’s total retail sales; 4.1 percent to Avon’s; and 2.1 percent to Clorox’s.
The government of Venezuela announced the bolivar devaluation by almost threefold on February 8, 2013. The bolivar exchange rate was fixed in terms of the U.S. dollar at a rate of 6.3 bolivars from 4.3 bolivars earlier. According to Venezuela's finance minister Jorge Giordani, the aftermath of devaluation is likely to emerge no earlier than February 13, 2013.
Over the past nine years it was the fifth such move made by the country’s authorities. In doing so, they expect to reduce the cost of exports and increase exports’ volume. At the same time, the opponents say that the devaluation would only accelerate inflation, because about 70 percent of products consumed in Venezuela are imported.
The Financial Times said that Venezuelans were concerned about possible rising prices and rushed into panic buying of household appliances and food last weekend. According to Bloomberg, some consumer electronic stores set per person sales limit amid too high demand for TVs.