Raymond Sagayam, the manager of the €150m (£129m) credit fund, has also shorted cyclical European sectors including automotive, chemical and building. The French corporate sector has also been shorted along with European sovereign debt.
Sagayam predicts Hungary and Poland are “going to get decimated” but currently represent expensive shorts since the associated economic risk factors are already beginning to be priced in.
Vulnerable economies, such as export-driven Korea, are next in line to suffer the consequences of contagion emanating from the sovereign debt crisis while countries like Mexico and Columbia may yet avoid disaster depending on US performance.
US recovery efforts will largely dictate the vulnerability of countries like Mexico since it is currently the third largest trading partner with America.
Sagayam is “not getting carried away” on the subject of a US recovery but indicates the promising unemployment figures that have recently been released.
On the subject of China, Sagayam is optimistic but suggests a better entry point to the market may present itself early next year, based on the current problems exhibited by the housing market.
To receive more relevant articles like this one, why not sign up to our briefings and breaking alerts by clicking here.