BlackRock CEO Larry Fink sees higher equity markets next year

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BlackRock Chief Executive Officer Larry Fink said on Tuesday that the world will see higher equity markets in 2020, shrugging off concerns about a global economic slowdown.

"The world in 2020 will witness higher equity markets,” said Fink, who heads the world's largest asset manager, at the Future Investment Initiative in Saudi Arabia.

US consumption has not been this strong in ten years, while Europe is stumbling along with pockets of growth, he said, and added that "CEO confidence is very low." "The fear that we see is enormous," Fink added.

BlackRock opened an office in Riyadh last month as it aims to capitalize on Saudi Arabia’s ambitious reform plan.

Since Saudi Arabia’s Crown Prince Mohammed bin Salman introduced the ambitious reform plan known as Vision 2030 in 2016, the Kingdom has made strides towards diversifying its economy and reducing its dependence on oil revenues.

Most recently, Saudi Arabia jumped 30 spots in the World Bank’s Ease of Doing Business 2020 index – the biggest improvement and highest jump worldwide. Reforms under Vision 2030 have led to improved access to credit, strengthened minority investor protections, and facilitated the resolution of insolvency in the Kingdom, according to the World Bank.

Climate change

Fink also addressed climate change, calling for a shift to renewables particularly for powering electricity grids.

“I do believe that as capitalists, if we don’t focus on climate change, we are going to be stranded ... There is no reason why much of the electricity should be powered by wind and solar.”

However, he said he was not concerned about the future of hydrocarbons, as there will be continued demand for them.

“But when you have an opportunity to transfer your electrical power grids and other things like that, and to have more sustainability in terms of automobiles and powering cities ... we need to create more public-private infrastructure opportunities.”

He added that he saw an “awful need” for infrastructure across the world, including in the United States, and called for long-term planning over “short-termism.”