Sterling Asset Management, through its vice-president for fixed and foreign exchange Eugene Stanley, strongly believes that local investors are taking more risks to try and get higher returns — especially after the world-leading performance of the Jamaica Stock Exchange.
Speaking at a recent investor’s forum put on by the company, Stanley highlighted that yields on Government of Jamaica USD international bonds have fallen by more than 20 per cent in the last five years. He further offered that local investors are eager to take part in the rally and the plethora of new investment instruments. He then warned that there is danger in that some investors may not be aware of the risks involved.
“Back in 2014, GOJ USD bonds were yielding between 3.756 per cent and 8.62 per cent,” he explained.
“Fast-forward to 2019, GOJ USD bonds of the same likes are yielding between 2.763 per cent and 6.31 per cent. As such, investors are being forced to look elsewhere for returns.
“There has been an increase in corporate debt issuance locally, and we have seen a rise in bond and preference share issues from local companies looking to raise funding.”
Stanley maintains that investors can get higher yields on safer and more liquid instruments overseas.
“Based on the recent local corporate bond and preference share issues, we at Sterling have found out that investors are not always sufficiently compensated for the risks involved in the projects or credits,” he revealed.
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