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BlackRock sees slower global econ recovery in H2
DUBAI (Reuters) - Global economic recovery will be "meaningfully slower" in the second half of 2010 due to fiscal deficits and debt issues in developed nations, but emerging markets will help underpin the rebound, asset manager BlackRock (BLK.N) said on Tuesday.
BlackRock, the world's largest asset manager, said even though it does not expect the global economy to slip back into a recession, the rebound in economic activity which began in early 2009 has not been sustained in the latter part of this year.
"We do not believe that we are slipping back to recession, but we do expect the global economy to grow at a meaningfully slower pace in the second half of 2010," Stephen Hull, a director and investment strategist at BlackRock, said in a statement on Tuesday.
The U.S. firm, which manages more than $3 trillion in assets, also said emerging markets would make a significant contribution to global growth and demand from yield-hungry investors will make local currency emerging market debt attractive.
"There is a global search for yields, and GCC (Gulf Cooperation Council) as a region is attractive," Nick Anderson, managing director for the Middle East and Africa told reporters in Dubai.
However, government bonds were expensive as yields were close to "record lows" amid a low interest rate environment, the money manager said in a presentation slide.
Yields on 10-year Treasury notes were little changed in Asia on Tuesday as the market awaited a Federal Reserve meeting later in the day for impetus, with any hint of further future easing expected to provide a boost for debt.
In the presentation, BlackRock said global equity valuations were close to their historical average and equity risk premium, which investors demand for owning equities over risk-free assets was back to levels seen during the global financial crisis.
Most emerging stock markets will finish 2010 with much stronger gains than their rich world counterparts, according to recent Reuters polls that showed only Japanese and Chinese bourses ending the year in double-digit slumps.
Emerging stock indexes -- which suffered terribly in the aftermath of Lehman Brothers' collapse two years ago -- have far outperformed their rich-world counterparts, where trading volumes remain historically thin.
"We don't think emerging market stocks are over valued," Nick Nefouse, a director and product strategist at BlackRock said.
The asset manager also said it sees oil prices between $60 and $80 a barrel for the short term and total cost of production for gold, including exploration, development and mining at $900 per ounce.
(Reporting by Dinesh Nair; Writing by Amran Abocar; Editing by Jason Benham and Hans Peters)
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