(Finance) – The BlackRock Investment Institute moved to a “neutral” position from “overweight” on the credit, saying yields are not enough to compensate investors for tightening credit conditions. At the same time, a statement reads, he switched to “neutral” from “underweight” sui private markets following recent weakness in the US regional banking sector.
“The repercussions of problems of the banking sector and further tightening of credit conditions add to the pressure on public credit, but in our view could represent a potential advantage for private credit – it is explained – We believe that the increase in interest rates and the increase in competition for deposits will exert pressure on the banks and will induce them to withdraw some loans. We see this leaving room for non-bank lending and private credit to play a bigger role.”
The bottom line, argues the BlackRock Investment Institute, is that “we see income attractiveness in the new regime of higher market and macro volatility and prefer private over public credit on a strategic horizon. We see amirror image in equity, strategically preferring public to private“.
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