A shift in the global financial markets has prompted calls from investment advisory firm, Sterling Asset Management Ltd, for investors to look to the global market for more USD fixed income investment opportunities in 2019.

President and CEO of Sterling Asset Management Charles Ross, on Friday revealed data which showed that JMD interest rates are currently below the rates of return on USD investments.

He pointed to a 42 per cent year-on-year decline in the 10-year GOJ JMD yield.

Ross was speaking at the 21st General Meeting and the 30th Anniversary celebrations conference of the Caribbean Academy Sciences held at The University of the West Indies, Mona over the period November 27-30, 2018. Sterling Asset Management, presented under the theme “Data-Driven Decision Making:

Practical Observations from the Public and Private Sectors in Jamaica,” led by Dr Parris Lyew Ayee.

“Local interest rates are at historical lows. They no longer compensate investors for the risk of inflation — which has averaged 8.9 per cent per annum for the last 17 years — and devaluation, which has averaged about 11 per cent per annum for the last 40 years,” Ross told the audience, according to a recent news release.

According to the CEO, investors should look to attain higher yields on safer liquid global securities with upside price potential for the new year. If investors should choose to invest in bonds, Ross is advising that the bonds have maturity dates of five years or less with high credit quality.

In further advising investors to re-evaluate and potentially reorganise their portfolios, as well as first-time investors looking to pump US$50,000 in USD securities; Ross encouraged investors to look to the global market for higher US interest rates. In fact, he wants investors to capitalise on intermittent market sell-offs to capture greater yields.

“Investors have been profiting from the increased volatility.”

“Some investors are acquiring European corporates that are beaten up because of Brexit and the Italian budget impasse,” states Ross. “The point is — volatility is higher, and so is the opportunity for making money.