Pimco Buys Abu Dhabi, Qatar Bonds After Dubai Shock (Update1)
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By Wes Goodman and Bernard Lo
Dec. 10 (Bloomberg) -- Pacific Investment Management Co., which runs the world’s biggest bond fund, is buying the debt of Abu Dhabi, Qatar and Ras Laffan Liquefied Natural Gas Co., said Michael Gomez, co-head of emerging markets at the fund manager.
The bonds fell after Dubai World, the state-run holding company, sought to delay payment on some of its debt, Gomez said. Dubai’s announcement on Nov. 25 spurred an increase in the cost of insuring government and company debt from default around the world. RasGas, a venture between state-run Qatar Petroleum and Exxon Mobil Corp., is one of Qatar’s two producers of gas.
“We’re coming in and buying,” said Gomez, who is based at the company’s main office in Newport Beach, California, in an interview with Bloomberg Television. “In any selloff, we’ll be accumulating even more. We think they’re cheap.”
Gomez also said China will allow the yuan to gain in 2010, reiterating comments from a report he posted on the Pimco Web site on Dec. 3.
“More flexibility will be introduced into the currency,” he said.
China has kept its currency at about 6.83 per dollar since July 2008 to help sustain exports.
Pimco Total Return Fund, run by Bill Gross since its inception in 1987, may this month become the biggest mutual fund in the industry’s history, surpassing the record $202.3 billion reached by Growth Fund of America in 2007, according to researcher Morningstar Inc.
Pimco is a unit of Munich-based insurer Allianz SE.
To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net.
Last Updated: December 9, 2009 19:20 EST
