Marketplace Logo Donate

Daily business news and economic stories from Marketplace

There’s a reason they’re ‘frontier’ bonds

Subscribe to our Newsletters

TEXT OF STORY

Bill Radke: If the financial crisis and the recession are the sickness, and the medicine is low interest rates and a flood of cash into the market, then what are the medicine’s side effects? Well, one of them is starting to pop up in what are called frontier markets — from Vietnam to Belarus. Marketplace’s Jeremy Hobson has that.


Jeremy Hobson: Bond investors are awash in dollars. One told me it was time to pass the snorkel. What to do with all that money? Forget Uncle Sam — his bonds aren’t paying much of a return these days.

Saleh Daher is managing director of the Turan Corporation. He says the best interest rates come from countries you need a passport, and maybe a couple of shots, to get to.

Saleh Daher: There is a tremendous appetite for return all around the world. Even faraway places like Nigeria and Angola.

He says so-called frontier bonds can pay as much as much as 8 percent more interest than U.S. treasuries. And if you have a taste for adventure, some upcoming issues include bonds in Vietnam, Belarus and Iran.

But remember, there’s a reason they’re called frontier:

Daher: If times are good, maybe they’ll get paid. If times are bad, they may not see their money ever again. This is the problem.

Daher says investors should beware: As soon as Washington starts raising interest rates, the frontier gold rush could lose a bit of its shine.

In New York, I’m Jeremy Hobson for Marketplace.

What's Next

Latest Episodes From Our Shows

Listen
3:51 PM PDT
26:47
Listen
7:30 AM PDT
7:33
Listen
1:37 PM PDT
1:50
Listen
2:59 AM PDT
8:03
Listen
Aug 18, 2022
12:53
Listen
Jul 7, 2022
30:13
Listen
Aug 9, 2022
24:46
Exit mobile version