UPDATE 1-PIMCO sees Greece action ineffective; UK downgrade

* Govts have not said how much they will give Greece – PIMCO

* Firm underweighting UK, U.S., pan-Europe 10-year bonds
(Adds comment)

By Faith Hung

TAIPEI, April 1 (BestGrowthStock) – PIMCO sees Europe’s action on
Greece as ineffective in fixing the country’s problems, while
Britain’s sovereign debt rating could be downgraded within a
year, a top executive of the world’s largest bond fund said.

Scott Mather, head of global portfolio management at Pacific
Investment Management Co (PIMCO), told a briefing in Taipei on
Thursday that the company was underweighting UK, U.S. and
pan-European 10-year sovereign bonds.

“Miracles are needed in the next six months in order to keep
economic growth in the developed world,” Mather said.

PIMCO has been warning investors to stay away from developed
countries like Britain with heavy debt burdens, recommending
instead shifting assets to Asia and developing countries.

Confidence in Greece as a borrower has been badly shaken by a
300 billion euro ($405 billion) debt pile that exceeds the
country’s 240 billion euro annual economic output. It has about
23 billion euros worth of bonds — equivalent to almost 10
percent of its gross domestic product — maturing between now and
the end of May.

Eurozone leaders last week agreed to a joint financial safety
net with the IMF to ease Greece’s debt crisis and restore
confidence in the euro, which has lost 5.5 percent of its value
against the U.S. dollar this year.

Mather said, however, that European governments had not said
how much money they were going to put into Greece.

For a factbox on the eurozone Greece agreement, see
[ID:nLDE62O2KY].

Last month, PIMCO said it was maintaining its negative stance
on British gilts because the amount of debt the country would
have to issue in the future should lead to inflation and a
depreciating currency.

Britain’s record-high debt has caused disquiet among
investors, and Standard & Poor’s has put the country’s top-notch
triple-A rating on a negative watch. See [ID:nLDE62G156] for a
factbox on Britain’s ratings.

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UPDATE 1-PIMCO sees Greece action ineffective; UK downgrade