Aug 28 Reuters The discovery of increased reserves of crude oil in Namibia has sparked interest in Namibian assets, with an index fund tracking local government bonds poised for its biggest annual jump on record.

The Exchange Traded Fund tracking local government bonds is listed on the Namibian Stock Exchange and in South Africa and has jumped over 20 in U.S. dollar terms since Portugalbased Galp39;s discovery in April that the Mopane field could hold at least 10 billion barrels of oil.

Since then there has been interest from at least 12 other oil majors.

The fund is on track for its biggest annual gain nearly 12 in U.S. dollar terms. Meanwhile, an ETF tracking the closely watched JPMorgan emerging markets bonds index has gained 3.6 yeartodate.

Yields on local sovereign bonds have dropped further following the discovery, with those on bonds maturing in 2037 declining around 150 bps since April, while those on papers maturing in 2050 down around 200 bps.

Most of the bonds issued are held by Namibian pension funds, but we are seeing some foreign buying now. We have seen massive yield compression … since the oil discoveries were first announced, said Rowland Brown, cofounder of Cirrus Capital based in Windhoek.

Brown added that Namibian government bonds were still paper settled, leaving foreign investors looking to the ETF to increase exposure to the resourcerich country.

The southwest African nation has garnered attention from major international energy…