Latest news with #PramolDhawan
Reuters
6 days ago
- Business
- Reuters
Bond giant PIMCO sees emerging markets in 'Goldilocks' moment
June 26 (Reuters) - Emerging markets are enjoying a "Goldilocks" moment, heavyweight bond fund PIMCO told Reuters, as U.S. President Donald Trump's erratic policy moves push the dollar down and send investors away from U.S. assets. "This is the most prominent capital rotation we have seen for the best part of two decades ... and we still think we are in the early innings of this," said Pramol Dhawan, PIMCO's head of EM portfolio management, outlining the $2 trillion asset manager's second-half view on emerging markets, where the firm holds some $70 billion in assets. "We are very constructive on the asset class, we think it is a Goldilocks-type backdrop for EM assets," he said, pointing partly to investor overexposure to the U.S. and a weakened dollar. PIMCO is the latest asset manager to warm to emerging market assets with EM local currency debt enjoying record inflows in recent weeks. The rotation is driven by import tariffs, rising concerns over U.S. debt levels and some loss of confidence in the government there, Dhawan said. Parts of Europe, Asia, and Latin America are the preferred destinations. The dollar index (.DXY), opens new tab is down 10% year-to-date while emerging currencies (.MIEM00000CUS), opens new tab have gained nearly 7%. "Flows have been very strong for the first time in a number of years," Dhawan said. Flows to local currency assets outstripping money headed for emerging market hard currency ones was "a sign of investors' willingness to embrace the dollar depreciation story and think more internationally around a search for yield." Emerging stocks (.MSCIEF), opens new tab are outperforming the S&P 500 (.SPX), opens new tab so far this year by 10 percentage points, while local currency bonds have returned more than 11% this year in dollar terms. (.JPMGBIEM), opens new tab U.S.-based investors did not have sufficient exposure to and were trying to figure out if this rally has durability, Dhawan said. "EM is in a good position where the underlying fundamentals are pretty healthy and robust," he said, adding that he did not expect capital flows to stop. Net capital inflows from non-residents to emerging markets are estimated at $887 billion in 2025, up from $852 billion in 2024, and forecast to hit $935 billion next year, according to the Institute of International Finance. Investor interest was also more broad based, Dhawan said, adding that the institutional investor base had become more established in emerging markets. Dhawan dismissed the risk of a policy reversal under Trump that could trigger a spike in the dollar. "These capital flows are genies that can't be put back in the bottle because they are irrespective of what the U.S. does now, there's been some loss of confidence in the administration."
CNBC
25-06-2025
- Business
- CNBC
Capital reallocation out of U.S. helping emerging markets, says PIMCO's Pramol Dhawan
Pramol Dhawan, PIMCO Head of Emerging Markets, joins 'Closing Bell Overtime' to talk emerging markets.
CNBC
25-04-2025
- Business
- CNBC
'Sell America' trade is a 'paradigm shift', says PIMCO's Pramol Dhawan
Pramol Dhawan, PIMCO Head of Emerging Markets portfolio management, joins 'Closing Bell Overtime' to talk investing opportunities outside of U.S.
Bloomberg
15-04-2025
- Business
- Bloomberg
Pimco Cuts Turkey Bet as Politics Vie With Sky-High Yields
Pacific Investment Management Co. trimmed its holdings of Turkish bonds last month amid the selloff sparked by the arrest of President Recep Tayyip Erdogan's top political opponent. 'We are still positive on Turkey but our position is smaller,' said New York-based Pramol Dhawan, head of emerging-markets team at the $1.95 trillion money manager. The political turmoil was 'destructive for international investor confidence and it's destructive for the local institutions in Turkey.'
Zawya
03-04-2025
- Business
- Zawya
PIMCO steps up private lending to emerging market governments
LONDON - Bond giant PIMCO has privately lent nearly $6 billion to emerging market borrowers, mostly governments, this year alone, securing higher returns and better lender protections, its head of emerging markets portfolio management said on Wednesday. That is already nearing the roughly $8.5 billion PIMCO lent last year in 27 deals, Pramol Dhawan told Reuters, out of a total of around $25 billion it has provided in recent years. For emerging markets wary of being caught out by unfavourable changes in broader sentiment, private credit - which is also booming in developed economies - is seen as a more flexible but also less visible way to borrow. Countries PIMCO has lent to include Panama, the Dominican Republic, Saudi Arabia and Qatar, Dhawan said on the sidelines of a conference in London. The asset manager lends through loans or private bonds as well as trades where PIMCO buys existing public bonds at a discounted price that is not disclosed, Dhawan said. The firm prefers lending to borrowers with low investment-grade or high sub-investment grade ratings, he added. "We've got both inflows as an asset manager, and we have a large private credit team. We can leverage those two together, find bespoke solutions," Dhawan said. He said PIMCO could secure a 150 basis-point pick up relative to public investment-grade bonds from the same borrowers, while for the high-quality end of the high-yield market, that can reach as high as 300 bps. The other advantage of the off-market deals is that PIMCO can write its own lender protection terms known as covenants, which offer it more protection than those on public deals. Emerging market governments were choosing to pay up for the private debt to secure optionality, particularly following the experience of the COVID-19 pandemic where some emerging markets, especially smaller, riskier frontier markets, were locked out of capital markets, Dhawan said. Some issuers also do not want to mark down their Eurobonds with a public debt sale, he added. Giving the examples of Panama and Egypt, Dhawan said the higher-cost private credit extension was a very small share of their debt stack, however, at around 3%. Demand to lend to investment-grade governments in this way was coming predominantly from insurers, Dhawan added. "Pretty much every U.S. insurance company that we pitch this to is like: sure. Why not?," he said, as they grow worried about U.S. equity market volatility. (Reporting by Yoruk Bahceli, Additional reporting by Marc Jones; Editing by Dhara Ranasinghe and Alison Williams)
