Gray: Europe to see further bailouts in 2011

Portugal will need a bailout in 2011, but the future of the eurozone will depend on the fate of Spain, Italy and Belgium, says MAM Funds' Martin Gray.

Gray, the manager of the £563m Miton Special Situations portfolio, has taken the fund's European exposure down to just 2.8% in the view the eurozone will remain troubled for some time to come. "Portugal is likely to need some sort of bail-out in 2011, but the fate of Spain (and perhaps Italy and Belgium) will be the real test," he says. He adds it seems "inexplicable" yields on German bunds have risen by around 75bp since the lows experienced last autumn. "A large current account surplus with little sign of inflation, should surely be sending the yield lower? "The market, however, ...