BlackRock CEO Larry Fink is cautiously optimistic, despite the unprecedented decline in the global economy and markets caused by the coronavirus pandemic. However, he sees tremendous opportunities in this market.

Share Market Live

NSE

“In my 44 years in finance, I have never experienced anything like this,” Fink said in an annual letter to shareholders. “I do believe that the economy will recover steadily, in part because this situation lacks some of the obstacles to the recovery of a typical financial crisis," he added.

The decline in stock markets this month has created an opportunity for some clients to move more into equities, he said. He cautioned that it is impossible to know if markets have bottomed and that heavily indebted companies will struggle in the weeks ahead.

“For some clients, the recent sell-off created an attractive opportunity to rebalance into equities,” Fink said. “Indeed, many of our clients – even those who generally have a heavy allocation to fixed income due to their risk profiles – are looking to increase their equity allocation in this market.” He urged investors with long liabilities, that its time to start adding risk, not run away.

“At BlackRock, we take a long-term view of markets, and we take a long-term view in the way we run our company. The world will get through this crisis. The economy will recover. And for those investors who keep their eyes not on the shaky ground at our feet, but on the horizon ahead, there are tremendous opportunities to be had in today’s markets," Fink stated.

Companies and investors with a strong sense of purpose and a long-term approach will be better able to navigate this crisis and its aftermath, he wrote.

"We are seeing central banks become very aggressive, taking on the responsibility of stabilizing markets, doing a good job of providing liquidity - unlike 2008 which became worse and worse because of liquidity crunch. That being said, a lot of leverage in the system – personal leverage and hedge funds. We are seeing vast amounts of liquidation particularly amongst hedge funds which are causing huge stress in markets. But again, this is not a financial crisis. That’s why when fed announces ambitious programs, markets continue to slide. This is a crisis of confidence," the Blackrock CEO stated.

BlackRock manages $7.4 trillion for clients around the world and has the industry’s biggest ETF franchise.