May 18 (Bloomberg) -- Emerging-market stocks may gain an average of 20 percent this year as they rebound faster and stronger than their peers in developed countries, said Bob Doll, vice chairman and chief investment officer for BlackRock Inc.

The global economy has probably seen its worst in the past two quarters, with developing nations already starting to emerge from the recession, Doll told reporters in Singapore today.

“If in fact we have seen a bottom in markets and economies are going to recover, the emerging parts of the world will recover the most and the fastest,” Doll said. “After all, their recessions were largely unwanted inventory build-up and not the credit bust in the Western world.”

The MSCI Emerging Markets Index has already gained 25 percent this year, with developing countries making up all 10 of the world’s best performers. That’s outpaced the 2.3 percent retreat in the Standard & Poor’s 500 Index.

Doll reiterated comments made on May 4 that the S&P 500 may retreat from current levels before rallying to end the year at 1,000. That represents a gain of about 11 percent for the whole of 2009.

“Emerging markets, if they are going to do better than that, are going to do closer to 20 percent,” Doll said. “There are some that already have. Some have done better than that.”

Doll joins Templeton Asset Management Ltd.’s Mark Mobius in predicting gains for developing countries. Mobius, who helps oversee $20 billion of assets, said in an interview earlier this month that emerging-market stocks may “break out” into a bull market at the end of the year.

Brazil, China

Credit Suisse Asset Management also said it favors shares in Asia and Latin America to those of the U.S., Europe and Japan, Vice Chairman Bob Parker said in a May 4 interview.

Brazil is its top pick among the four so-called BRIC markets -- which also include Russia, India and China -- because the nation is the most “rapidly diversifying,” Doll said.

The investment firm favors shares in China, whose 4 trillion yuan ($586 billion) stimulus package is the largest outside the U.S., Doll said.

Still, valuations in China have increased after the market has “run hard,” Doll said. The Shanghai Composite Index has rallied 46 percent this year, the world’s third-best performer, and is now valued at 27 times reported earnings, according to data tracked by Bloomberg. That’s up from a low of 13 times reached in October.

India’s election results will also help attract capital, providing a boost to the nation’s stock market, Doll added. The benchmark Bombay Stock Exchange Sensitive Index soared 17 percent today, extending its year-to-date gain to 50 percent.

Taiwan is among other emerging markets that BlackRock favors even though it is “taking some money off the table” following a rally in the shares, Doll said.

The asset manager also favors equities in South Korea and South Africa, he added.

To contact the reporter on this story: Chen Shiyin in Singapore at schen37@bloomberg.net.

Last Updated: May 18, 2009 05:59 EDT