High-Yield Party Returns to Emerging Markets Too Cheap to Ignore

Gap in risk premium over high grade falls fastest since 2005
Bond rally deepens amid fading panic over default probability

Vendors wait for customers at the Kantamanto textile market in Accra, Ghana.
Photographer: Andrew Caballero-Reynolds/Bloomberg

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By Netty Idayu Ismail

November 20, 2022 at 5:00 PM UTC

Updated on

November 21, 2022 at 12:30 PM UTC

This article is for subscribers only.

Yield hunting is back in emerging markets with a force not seen for 17 years.

Investors are buying the bonds of some of the world’s poorest nations so fast that the risk premium on them is falling at the quickest pace since June 2005 relative to their investment-grade peers, JPMorgan Chase & Co. data show. And countries that were tottering on the brink of default just months ago -- such as Pakistan, Ghana and Ukraine -- are leading this high-yield rally.