Since early January, metals prices have turned sharply higher, thanks in part to a weaker US dollar and improved sentiment about China. In turn, we have seen a strong reaction in the bonds of metals and mining companies — investment grade and high yield metals and mining bond yields are tighter by 300 and 500 basis points, respectively.1 Following such strong moves, the question now is whether there is still value in metals and mining bonds.

The Invesco Emerging Markets team spent a week traveling through Colombia and Peru, meeting with company management teams, consultants and government officials. During our trip, two themes were prevalent that could have broad implications for local companies and global investors: the relative under-penetration of modern-format retailing throughout Colombia and Peru, and the severe need for infrastructure improvement.