June 13 (Bloomberg) -- Carlos Gomez stared at the computer screens projected on the wall of the coffee shop at Colombia's stock exchange and watched his savings disappear. He has lost 45 percent of his portfolio -- $15,000 -- since March.

``This is too stressful,'' said Gomez, 44, as he tapped nervously on a calculator yesterday just before trading was suspended because the IGBC index had fallen 10 percent. ``It is affecting my health and my sleep.''

That drop made Colombia the biggest decliner yesterday among markets included in global benchmarks. Today the carnage continued as the index fell 9.46 percent, to 6,338.81, at 11:14 a.m. New York time. Colombia was the biggest world decliner again.

Markets slumped worldwide. The Morgan Stanley Capital International Emerging Markets Index, a measure of stocks in 25 developing countries, was down 4 percent at 11:17 a.m. in New York, poised for the lowest close since Nov. 29.

In Colombia, panic selling by small investors has been blamed by such analysts as Rupert Stebbings, a trader at Asesores en Valores brokerage in Medellin, for the drop in the stock index. It has lost a third of its value in two months. Colombia for two years was one of the biggest gainers among world indexes tracked by Bloomberg.

``A combination of massive gains, small, unprofessional investors and an index made up almost entirely of one group of companies is a potent mix for a major decline in value when things go wrong,'' said Ben Laidler, an equity strategist at UBS Warburg LLC in Santiago, Chile.

Cross Shareholdings

Colombia's thinly traded share index is about 64 percent made up of a group of Medellin-based companies, Grupo Antioquena, each with cross holdings in the others. Bancolombia SA, the nation's biggest bank, is the heaviest weighted in the index and is 31.8 percent owned by Suramericana de Inversiones SA, the largest insurance holding, which is third-weighted.

``There are few other plays worthwhile and when they decline, they drag the rest of the market with them,'' said Carlos Senior, 58, who used his personal savings to enter the market in December.

Now his original $32 million investment has lost 18 percent and Senior said he has had enough of stocks. He plans to invest in construction instead from now on.

``I am out of this,'' says Senior, who runs a company that provides services for import and export companies. `This is too much of a Russian roulette and I want to invest in something more concrete.''

Coffee for Investors

The number of small investors has increased since President Alvaro Uribe took office in August 2002 and started his battle to end the violence caused by rebels bent on overthrowing the government. Even with the recent selloff, the index is still up 452 percent since then.

The ground floor coffee shop serves cakes and Oma coffee. It was opened just over a month ago because the space provided for investors in the 12th-floor stock exchange had become too crowded.

Gomez, who was huddled with 20 or so investors in the black and chrome coffee shop, said he believed the IGBC index could hit as low as 6,000 before heading up to 9,000 points in about two years.

``This past month has been a nightmare and it's really been felt in here,'' said Rafael Perdomo, 26, an engineering student who has been investing his own cash for a year.

Still, Gomez, who runs a computer consulting firm, hasn't given up.

``I am not going to invest much for now, but there are going to be some great buying opportunities down the line,'' said Gomez -- before turning back to the screens and focusing on the declines.

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To contact the reporter on this story:
Helen Murphy in Bogota at  at Hmurphy1@bloomberg.net

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