BOGOTA, April 29 (Reuters) - Measures adopted by the

Colombian stock exchange and securities issuers to improve

liquidity could be enough for the country to hold onto its

"emerging market" classification and stay in a key JPMorgan ( JPM )

index, but more progress is needed, the stock exchange's

president said.

Last year JPMorgan ( JPM ) warned Colombia could be excluded from

its MSCI emerging markets index and be downgraded to a frontier

market due to declining liquidity.

The warning sparked a sharp drop in share prices across the

stock exchange as a downgrade would drive away foreign investors

guided by the bank's indexes.

Just three Colombian stocks are included in JPMorgan's ( JPM ) MSCI

index; Bancolombia, Bancolombia Preferential and energy

conglomerate ISA.

The stock exchange has cut costs for issuing new shares,

while companies have hired liquidity providers to promote them,

among other measures, in a combined effort to boost liquidity,

Colombian stock exchange chief executive Andres Restrepo said.

"From our figures, we don't think the downgrade risk will

materialize," Restrepo told Reuters late on Friday. "The

performance of the three stocks that form part of the MSCI

Emerging index has recovered."

In March, Davivienda, Colombia's third-largest bank, carried

out a share issue for $183.4 million, while Spanish bank BBVA's

Colombian unit said in mid-April that it was preparing a share

issue worth 220 million euros.

The next step will be to promote including other companies

into JPMorgan's ( JPM ) MSCI emerging markets index, which will require

more share issues, said Restrepo, who has held the job since

February.

Cementos Argos could be a candidate following a

decision to convert its preferential shares into common shares,

Restrepo said, adding that Colombia's majority state-owned oil

company Ecopetrol could return to the index after it

was pushed out at the end of 2022.

"Ecopetrol could very quickly enter the index with a

decision I understand is no small thing, but which is to

increase its float by selling no more than 3% (of its shares),"

Restrepo said.

Currently, 11.5% of Ecopetrol's shares are traded on the

stock market, while 88.5% is owned by the Colombian state.