LUXEMBOURG May 5 The continued global economic
expansion offers an "extraordinary window of opportunity" for
investors, particularly in European markets that haven't yet
fully priced in the positive outlook, Blackrock vice chairman
Philipp Hildebrand said on Friday.
Investors are underestimating the positive impact of the
synchronised reflation trend that is helping to lift global
asset prices, he said, noting that Europe is also benefiting
from substantial European Central Bank stimulus.
"Europe has more upside potential than perhaps any other
region in the world today," Hildebrand told delegates at the
International Capital Markets Association annual general meeting
"Growth has returned and deflation risks have successfully
been fought off. It's an extraordinary window of opportunity."
The euro zone economy grew nearly three times faster than
the U.S. economy in the first quarter, and consumer and business
confidence is surging. Earnings growth is in double-digits and
corporate deal-making is near record levels.
European equity funds are poised to recoup the $100 billion
of investor flows that left the region last year, analysts say.
Hildebrand said investors tend to underestimate the strength
of synchronised inflation and growth trends, both on the upside
and the downside.
He said he is hopeful that U.S. capital expenditure and
productivity are finally turning the corner after years of
sluggish performance - "two missing pieces" that would cement
the U.S. recovery and the same globally.
That said, investors shouldn't get carried away, said
Hildebrand, vice chairman of the world's asset manager.
Debt levels globally are higher today than they were before
the financial crisis, ageing populations are putting a huge
strain on government finances in the developed world, and
productivity growth in most advanced economies remains weak.
"Add all that together ... and it's hard to see a return to
the golden days before the crisis," he said.
(Reporting by Jamie McGeever; editing by Mark Heinrich)