(Updates with comments from Bosomworth, changes dateline pvs
BERLIN, July 12 Pimco, the world's top bond fund
manager, is using the latest selloff in Italian government debt
to increase its holdings, according to Andrew Bosomworth, the
head of its fixed income portfolio management.
"We're using the dislocations in the market to reduce
underweights in Italy," Bosomworth told Reuters. "Italy is not
in the same boat as the peripherals. They're not comparable.
Italy has a debt stock problem but it's not comparable to Greece
in terms of institutions and track records."
Bosomworth said he was not talking up his portfolio. He said
Pimco was starting from an underweight position.
German daily Die Welt reported earlier in an excerpt of a
story to appear on Wednesday that Pimco believes the selloff in
Italian debt is exaggerated and presented an opportunity to buy
Bosomworth was quoted as saying that a big chunk of its
bonds are held by Italian savers. Pimco, which manages $1.2
trillion assets, is a unit of Europe's biggest insurer Allianz
Yields on 10-year Italian government debt jumped 30 basis
points to break 6 percent on Tuesday for the first time since
1997, edging closer to a 7 percent threshold after which Italy
is broadly seen losing the ability to finance itself, analysts
If the market does not stabilise, the European Central Bank
must take steps to ensure the situation does not lead to a
domino effect, Bosomworth told Die Welt.
"It would have to buy government debts massively in order to
stop the rates from rising," he said, but added that he did not
expect the situation to spin out of control.
(Reporting by Erik Kirschbaum in Berlin and Marilyn Gerlach in
Frankfurt; Editing by Elaine Hardcastle and Susan Fenton)