India and China present investment grade opportunities in post-coronavirus world: BlackRock

On Wednesday, BlackRock, the world’s biggest asset manager said, oil stocks, domestic tourism and debt in India and China are investment opportunities in its Asia outlook.

With $6.5 trillion of assets under management, BlackRock said, it expects the global economy to recover by 2022, at the earliest; in its regional outlook it said “Asia stands out” as a beneficiary when that recovery happens.

“We like China across the credit spectrum,” said Neeraj Seth, the fund manager’s head of Asian credit, since it is buttressed by strong government stimulus.

China’s state-owned businesses are likely to be in the investment grade category and its real estate sector looks promising because of potentially high-yield growth; India’s quasi-sovereign debt and bonds funding renewable energy is also a sweet spot in investment opportunities, said Seth.

“Oil majors, domestic travel and tourism stocks and carry-trade plays in Indonesia and India, as well as online businesses are chief among opportunities in equities,” said Stephen Andrews, BlackRock’s co-head of global emerging market equities.

“We are focusing on the post-coronavirus world”, said Andrews, while adding, “We see oil prices rising from the current $30 plus range over our (1.5-2 year) investment horizon”.

“Price-to-book values in India and Indonesia are at 1-2 decade lows”, said Andrews.

BlackRock expects the U.S. dollar to weaken over the next two quarters.

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