Hot Demand for Frontier Debt Is Poised to Start Cooling Off

Investors in frontier-market bonds are on course to get their best returns in seven years. It looks like it’ll be a lot tougher in 2020, Bloomberg News reported. Some of the biggest money managers are already becoming more selective. BNP Paribas Asset Management, which oversees almost $500 billion in assets, is sticking to countries with sound fiscal management such as Ivory Coast, or those with investment-grade ratings like Kazakhstan, Uruguay and Morocco. Aberdeen Standard Investments sees opportunities to get above-market returns by buying the bonds of Sri Lanka, Ecuador and Ghana. Rising debt loads and the increasing prospect of defaults in Argentina, Lebanon and Zambia are making investors more nervous. Read more