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Sunday, February 6, 2011

Larry Fink , the chairman and CEO of BlackRock: India is a better investment destination than China.

Economic Times MUMBAI:

Larry Fink , the chairman and CEO of world's largest fund manager BlackRock, said that India will be a better investment destination over China for global investors for at least coming two years before the latter moves to the next phase of growth. "If I could only invest in one out of the two at this moment, then it would be India for at least next two years. But once China connects the hinterland and establishes connectivity between factories, then it may reach a level that is substantially faster than their current GDP," said Fink. India's GDP grew 8.9% vis-a-vis China's 10.3 in the second quarter of the current financial year. 

Fink, who heads BlackRock that has more than $3.45 trillion assets under management, was in Mumbai recently after a whirlwind tour of San Francisco, Melbourne and Sydney. Commenting on the pullback by foreign institutional investors ( FIIs )) in the preceding few weeks, Fink said it was a temporary move and Indian equities still remain an attractive bet. "I really don't pay attention to these short term moves. The Indian market was up quite a bit so it's a reset. I think that the northern Africa situation, food price inflation and some governance issues have eroded confidence." he said. 

Fink said investments in US equities will definitely grow as the economy recovers, but the emerging markets investments will not suffer. "I think systematically investors are underweight on the US. And I think that US investors are systematically underweight on global equities. But I believe that emerging markets are compelling places to be in. I think that dynamics of India are as strong today as they were earlier. It might be a good time to get back into the market place," he said. 

Asked whether the political uncertainty, governance issues, and coalition friction make global investors like him nervous, Fink said investors come with eyes open. "It's part of India. If things were perfect, we make no returns, because everything will be easy to invest in. People focus on these data point and don't see the long term macro trends. To my perspective India would be an even better place to invest if we had a dialogue between business and government."