Turkish equities ’attractive’

Bloomberg

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"We like Turkey because valuation is very attractive," he said.

"You want to buy assets like Russia where people are very skeptical and they’re cheap," Blacklock added.

The two markets stand out as global stock market gains are "getting ahead" of fundamentals, he said at a presentation in Kuala Lumpur, adding that he expects a "multiyear" recovery for the credit crisis. Blacklock, whose funds manage $19 billion of assets, also prefers bonds than cash or stocks.

"You want to buy assets that aren’t priced for a rapid recovery," Blacklock said.

Istanbul Stock Exchange’s benchmark IMKB-100 index, which has gained 6.3 percent this year, is trading at an 8.1 multiple, almost a third of its five-year high of 23 times.

Blacklock also likes Turkish bonds and said he bought the government’s so-called inflation-linked bonds. He also prefers debt to stocks.

Meanwhile, Russia’s RTS Index now trades at 4.5 times reported earnings after rising 25 percent this year, the cheapest among the so-called BRIC markets that also include Brazil, China and India.

The MSCI World Index has surged 23 percent since the March 9 low this year after lenders from JPMorgan Chase & Co. to Bank of America Corp. said they made money at the start of

2009 and the U.S. government unveiled plans to buy as much as $1 trillion in toxic assets from financial firms. The measure trades at 13 times reported earnings. "It’s a bear-market rally," Blacklock said. "Based on historical experience, 2009 is likely to be a year of further pain rather than recovery."

Economist Nouriel Roubini, the New York University professor who predicted the financial crisis, said yesterday he was "still bearish" and that an economic recovery is going to take "longer than expected." Markets are "way ahead" of real economic data and this recession will last at least 24 months, Roubini added. Blacklock said stocks now make up 10 percent of his funds, down from 79 percent in October, while bonds rose to 36 percent from 19 percent.