Jamaica IMF progress spurs tightest spread compression across EM
* Jamaica's bonds have returned 20.2% this year
* Sovereign to shun public markets until 2017
* With balanced budget, focus shifts to growth
By Davide Scigliuzzo
WASHINGTON/NEW YORK, Oct 15 (IFR) - Jamaican bonds are proving to be one of EM's top performers this year as markets grow more confident that the country's economy is finally turning the corner.
A 177bp rally in the sovereign's bond spreads so far this year marks the largest compression of any EM country in JP Morgan's Emerging Markets Bond Index as investors cheer the island's progress in meeting targets set by the International Monetary Fund.
From a total return perspective, Jamaica's international bonds have gained 20.2% year to date, trailing only Belize and Honduras, which posted gains of 24.1% and 22.4% respectively.
The index, on the other hand, has returned 7.8%, with its average spread widening by 23bp.
"There was a lot of skepticism at the beginning of the year that Jamaica would stick to the timing of the IMF program," said Carl Ross, sovereign analyst at Boston-based asset manager GMO. Continuación...