BlackRock Inc. Chief Executive Officer Laurence D. Fink said the worst start of the year for emerging-market equities since 2009 is providing a buying opportunity.
“These emerging markets have growing and stronger balance sheets and a faster GDP,” Fink said in an interview with Charlie Rose that aired on PBS yesterday. Developing-nation equities are attractive because of their low valuations relative to the potential growth rates in these countries, Fink said.
The MSCI Emerging Markets Index climbed 0.9 percent to a three-week high, trimming this year’s drop to 4.9 percent. The selloff dragged the index’s valuation to less than 9 times projected 12-month earnings on Feb. 4, the cheapest since August and compared with a multiple of 14 for the MSCI World Index of developed-country equities.
Fink, whose firm is the world’s largest money manager with $4.3 trillion in assets, joins Templeton Emerging Markets Group’s Mark Mobius and Aberdeen Asset Management Ltd. in recommending developing-nation stocks.
Investors should buy Indonesian stocks because of the country’s expanding economy and a debt-to-gross-domestic-product ratio that’s lower than most of the countries in Europe, Fink said.
Global investors pulled $6.3 billion from developing-nation equities in the week through Jan. 29, the biggest outflow since August 2011, according to Barclays Plc, citing data from EPFR Global. Emerging-market stocks and bonds tumbled on concern China’s economy is slowing while the U.S. Federal Reserve pushes ahead with plans to reduce monetary stimulus.
While data today showed that China’s export and import growth unexpectedly accelerated in January, two gauges of manufacturing released earlier this month declined.
“You’re seeing a slowing economy at the moment and that’s disturbing the overall market,” Fink said referring to China.