Pimco says markets’ tame’ reaction shows Greece’s small impact


Pacific Investment Management Co. Chief Executive Officer Douglas Hodge said Greece’s impact on markets has been muted, even with chances of a positive resolution to the drama shrinking.

“Greece is a relatively small part of the EU and it has relatively small market impacts and we’ve seen that even over the last several days since the referendum,” Hodge said in an interview with Bloomberg Television’s Betty Liu at the Toronto Global Forum. Since the “no” referendum vote, “the markets have been pretty tame.”

Through Newport Beach, California-based Pimco, Allianz SE has the largest holdings of Greek bonds of any investor after the European Central Bank, according to data compiled by Bloomberg. European leaders told Greek officials earlier that they have one last chance to present a plan of economic reforms and spending cuts in exchange for a new European bailout.

“The chances of a positive resolution shrink with each day, seems like now every, hour, but there is still an opportunity between the Greek government and the troika,” Hodge said, referring to the European Commission, International Monetary Fund and the European Union. “We’re hopeful that there is some form of agreement.”

Financial markets have proved unexpectedly resilient in the face of the Greek drama, with yields on benchmark U.S. debt notes touching their lowest level in a month and European stocks up today. Borrowing costs for Spain and Italy, also struggling with huge debt loads, have dropped.