BlackRock buys Russia, Brazil, shuns China, India

TAIPEI (Reuters) - Investment manager BlackRock <BLK.N> is buying Russian and Brazilian stocks on hopes that energy and commodity prices will continue to rise, but is cautious on China and India despite drops in those markets, a Taiwan executive said on Thursday.

"We are buying shares of Russia and Brazil, as global supplies of energy and commodities remain very tight," Chang Lin-yun, managing director of BlackRock (Taiwan) Ltd, told Reuters on the sidelines of a fund industry event.

"Prices of these products have been strong for the last five years. We don't think this trend will change its course anytime soon," Chang said.

Companies that will benefit from the trend include Schlumberger <SLB.N>, the world's biggest oilfield services company, he added.

Oil prices have extended a five-year rally this year as investors seek out commodities as a hedge against inflation and bet that fast-growing oil demand in Asia and the Middle East will help to compensate for a weakening U.S. economy.

Shares in India and China, last year's high flyers, still have some downside despite falling sharply already this year, Chang said.

China's Shanghai Composite Index is down 39 percent year to date, while India's BSE index is down 19 percent.

"They have plunged a lot but they are not cheap in valuations, although they would be better buys in the longer term," he said.

China stocks trade at 16 to 17 times earnings multiples, while India shares are at 15 times, higher than 13 times for most emerging markets and 14 times for U.S. stocks, he said.

BlackRock is among the top two money managers in Taiwan's offshore funds market, which is worth more than T$2 trillion ($66 billion).

(US$1=T$30.28)

(Reporting by Faith Hung, Editing by Doug Young and Edmund Klamann)