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Asset Management / Asia Connect
BlackRock CEO optimistic about Asia, infrastructure
Despite uncertainties in the Asia-Pacific markets, Larry Fink, chairman and chief executive officer of the world’s largest asset manager BlackRock is still confident in the Asia story, especially with the prospect of China gradually opening up its financial markets to the world.
Darryl Yu 18 May 2016
Despite uncertainties in the Asia-Pacific markets, Larry Fink, chairman and chief executive officer of the world’s largest asset manager BlackRock is still confident in the Asia story, especially with the prospect of China gradually opening up its financial markets.
“China’s capital markets needs more institutional flows into China for greater market stability,” notes Fink. “The safest place right now is North America but that does not mean there are no great opportunities in Asia.”
Just last month Clearstream announced that it had the approval from Chinese financial authorities to link foreign investors to China’s US$5 trillion interbank bond market. This comes less than a year since Chinese authorities liberalized access by foreign central banks, sovereign wealth funds and global financial organizations to trade bonds over the interbank market.
In terms of finding that value within Asia, Fink believes that infrastructure investment may be the way forward for investors looking for additional yield. According to the Asian Development Bank (ADB), Asia needs around US$8 trillion of infrastructure investment between 2010 and 2020.
“I believe if we have big fiscal policy changes for infrastructure that investment will be at a higher coupon. That could be a great investment for many people.” Already China has been pushing through with its ambitious One Belt One Road economic plan to stimulate infrastructure growth along the ancient Silk Road route. Since the plan was announced 2013, the Chinese government has formed the Asian Infrastructure Investment Bank and the Silk Road Infrastructure Fund. In Hong Kong, the government recently announced the formation of the Infrastructure Financing Facilitation Office to ease the process of investing in infrastructure projects.
Fink is still also keen in the long term returns of equities despite the potential volatility spillover from China. “If I was confident that every government would listen and start doing fiscal policy we would have a big rally in equities,” highlights Fink. “There is a reason why Warren Buffett is a great investor. He takes his time and buys companies and sticks with them for years. We all should learn from that style of investing.”
 

    

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