Managers seek buying opportunities in Piigs as fears of Greek contagion spread

Fund managers are buying into southern Europe as macro-economic instability creates opportunities, amid fears Greek contagion could push economies in the region into recession.

Last month, shares in Greece, Portugal and Spain fell between 5.9% and 11%. At the same time, their bond yields have surged, with two-year Greek sovereigns hitting 24% last week. Against this backdrop, Niall Gallagher, manager of the GAM Star Continental European Equity fund, says he has increased positions in some companies hit by negative sentiment on Greece. Gallagher’s fund holds no stocks in Greece itself, but has about 6% exposure to Portugal, Spain and Cyprus. He increased positions in Spanish clothing retailer Inditex and Portuguese retailer Jeronimo Martins. He also holds...