Tags: Pimco | Gross | Mexico | Brazil

Pimco’s Gross: Investors Should Consider Mexican and Brazilian Markets

Friday, 29 Jun 2012 08:32 AM

The United States may be the cleanest of the dirtiest shirts among major markets these days but investors should keep an eye on Mexico and Brazil, says Bill Gross, co-founder of Pimco, manager of the world's largest bond fund.

“They have much more attractive balance sheets, higher growth rates, and more attractive and higher interest rates, as well,” Gross tells CNBC.

Gross says “America is the cleanest dirty shirt in terms of financial markets," CNBC adds.

“It’s where money is moving towards out of Euro land and out of all the risky peripheral countries,” he says.

The United States carries lower comparative debt burdens than European countries, is home to the world's reserve currency and has stable property rights.

Still, investors shouldn't take such traits for granted.

“It’s not ultimately and inevitably secure in this position,” Gross says.

More and more of the world's top initial public offerings are taking place in emerging markets these days.

Three of the top-10 initial public offerings in the last three months took place in Brazil, Malaysia and Mexico, the Financial Times reports.

The Facebook IPO grabbed headlines due to its sheer size at raising an initial $16 billion.

Europe, meanwhile, hasn't been a good place for companies to go public lately.

"Market conditions make these deals very challenging, and in many cases it seems that issuers and their advisers have simply not recognized the degree of price sensitivity," says Sam Dean, co-head of ECM at Barclays, according to the Financial Times.

“More market practitioners need to be willing to accept that several elements of European IPO market practice remain flawed.”


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