CentAm Sovereigns Return 10.85% YTD

Central American and Caribbean sovereign debt returned 1.53% in November, giving the region a 10.85% gain year-to-date, according to Bear Stearns. Belize, Bahamas, and Grenada outperformed in very thin trade, while Panama and El Salvador also did well. Bear Stearns has upgraded El Salvador to marketperform in its portfolio and keeps Panama at marketperform, both due to valuation considerations. It also cut Trinidad and Tobago to marketperform from outperform, following strong gains and based on expectations of more sovereign supply. “Domestic interest rates are due to rise further, potentially decreasing the attractiveness of the U.S. dollar external debt, at least on the margin,” said Bear, of T&T. In general, the shop views the region’s fundamentals as quite solid.