Contact: Petra Brandes 069 50500 3184 petra.brandes@blackrock.com Christof Danz 069 9441 8029 christof.danz@newmark.

de Predictions for 2012 from BlackRock: BOB DOLL SEES A SLOW GROWTH WORLD; EUROPE SLIPS INTO RECESSION AS US STOCKS POST DOUBLE-DIGIT GAINS ______________________________________ Europe the Big Swing Factor; World Can Have an Okay Year If Europe Avoids Disaster ____________________________ US Economy Will Grow by 2-2.5 Percent, But Corporate Earnings Wont Meet Expectations _______________________________

The BlackRock Investment Institute (BII) sees 2012 as The Year of Living Divergently
___________________ New York, January 5, 2012 - 2012 will offer investors a slow growth world in which the United States will face headwinds, yet still achieve positive economic growth, and Europe will likely slip into recession while avoiding more dire financial contagion, according to Robert C. Doll, Chief Equity Strategist for Fundamental Equities at BlackRock, Inc. (NYSE: BLK). Growth will continue to be hampered by the lingering effects of the global credit bust, including ongoing deleveraging partially offset by the forces of accommodative monetary policy in much of the world. Despite the ongoing debt crisis, however, an environment of modest economic growth will still allow corporate earnings to expand. This backdrop will allow equity markets to move higher, led by the U.S. According to Doll, the most significant global risk remains financial breakdown in Europe, which would tip the entire developed world, if not the emerging world, into a new recession. In 2012, the big swing factor for the world economy will be the success of the continuing effort to fix Europes debt and credit issues, Doll said. Failure to advance this effort could be disastrous.

At the same time, we dont need Europe to solve all of its problems in 2012 for the world to achieve an okay year, Doll said. Since there is already such a significant crisis premium baked into the markets, just avoiding disaster could be enough. In addition to movement in Europe toward resolution of its debt crisis, Dolls what can go right list for 2012 includes the U.S. heading toward fiscal responsibility, the emergence of a US manufacturing renaissance, a housing recovery, and/or an increase in confidence. On his list of key downside concerns are a systemic banking crisis in Europe, a true double-dip recession in the United States, a hard landing in China, a break-out of class warfare in the U.S., and a Middle East flare-up resulting in $150-perbarrel oil. In 2012, the world will most likely take a middle course that will avoid both the positive and the negative extremes, but also leave a host of critical issues unresolved, he said. Nevertheless, this middle course should be good enough to get investors off the sidelines, put their cash to work, and move into higher-risk assets. This bodes well for the stock market. The BlackRock Investment Institute (BII) sees 2012 as The Year of Living Divergently For well over a decade, Doll has been publishing his annual outlook and 10 Predictions for the year ahead in the financial markets and the economy. His commentary this year is complemented by the release of 2012: The Year of Living Divergently by the BlackRock Investment Institute (BII), which examines key forces likely to drive the global and national economies in 2012 and presents several potential scenarios for the coming year (to read the full BII commentary please Click here). The BIIs consensus is that in 2012, the world will likely experience a growing divergence between the faster-growing emerging markets and the debt-ridden developed world, in terms of their real economies and asset prices. Under the divergence scenario, emerging economies (including China) will lead the way in terms of growth, while the US economy muddles on and Europe undergoes recession followed by slow recovery in 2013. At the same time, however, the BII consensus also sees a real possibility of a far more challenging nemesis scenario sparked by an out-of-control European debt crisis. Such a scenario would result in a global recession, a credit crunch and steep losses across asset classes around the world. The BlackRock Investment Institute is a global platform launched in 2011 that leverages the firms expertise in markets, asset classes and investor segments to generate investment insights. The BIIs 2012: The Year of Living Divergently represents a consensus view among leading BlackRock portfolio managers including Doll.

A Muddle Through US Economy Grows by 2-2.5 Percent Doll believes that in the United States, a strong corporate sector, an improving consumer sector, and a financially strapped government sector will combine to provide modest but positive growth for all of 2012. While there will likely be some disappointments and positive surprises along the way, Doll is expecting an average growth rate of between 2 and 2.5 percent for the year. As with the world generally, the US economy can achieve an okay year just by continuing to muddle through, he said. Recession fears could re-emerge but we wont see one unless conditions in Europe deteriorate dramatically leading to the nemesis scenario outlined by the BII, Doll said. Our expectation is that unemployment will continue to fall and jobs growth will proceed, but both at disappointing rates. US corporate earnings will grow moderately but fail to exceed estimates for the first time since the Great Recession. Since the start of the economic recovery in 2009, earnings have consistently exceeded expectations. However, the pace of earnings growth began to slow in 2011 and we believe that trend will continue in 2012, suggesting that earnings growth expectations will not be met in the coming year, Doll said. On balance, earnings reports will be acceptable, but not stellar. While estimates for 2012 earnings for the S&P 500 are currently around $108, Doll believes that $103 is more likely, with about 6 percent earnings growth. At the same time, Treasury rates are likely to move somewhat higher in 2012 if the crisis premium that has kept risk assets cheap and Treasury rates low lessens, he said. If the left-tail risk of the European debt situation lessens, risk assets should perform better, with a reduction in credit spreads of all types, Doll said. US Stocks Will Post Double-Digit Gains, Outperform Non-US Markets US equities will achieve a double digit percentage gain in 2012 as multiples rise modestly for the first time since the recession. After contracting by about 15% in 2011, valuations will expand in 2012 as confidence improves on the back of acceptable, nonrecessionary economic growth along with continued low inflation and interest rates, Doll said. Should we see the sort of muddle-through environment we expect, that should be enough to bolster investor confidence, resulting in an inflow into equities. Dolls year-end target for the S&P 500 is 1,350-plus (the index closed at 1,257 on the last trading day of 2011). With reasonable earnings growth and cheap valuations, US equity markets should outperform non-US markets for the third year in a row, he believes. Emerging markets lately have significantly underperformed, due largely to monetary tightening based on inflation concerns, leading to economic slowdown, Doll said. At some point, perhaps during 2012, emerging market equities will resume outperformance. At the same time, Doll believes that the debt crisis in Europe and Japans persistent structural problems will hold those regions back relative to the United States.

Predictions for 2012 Here are Dolls predictions for 2012 with his full commentary on the key trends. 1. The European debt crisis begins to ease even as Europe experiences a recession.
The European debt crisis loomed large and drove high levels of volatility in 2011, causing most risk assets to experience significant downturns. Unfortunately, the debt crisis will continue to dominate risk discussions for 2012 as well. Thankfully, the authorities political and monetary moved from a position of complacence and inaction to one of irregular, but somewhat constructive action. The ultimate path to a solution is unclear, particularly given the varied interests of multiple countries and constituencies. Formulating incremental fiscal union, creating the enforcement mechanisms for austerity measures, and attempting to generate economic growth are each difficult, and seem impossible when combined. Nevertheless, we believe that all parties recognize the seriousness of the crisis and will continue to take enough action to avoid an outright catastrophe. In any case, however, it seems clear to us that Europes problems are significant enough to drive the region into a (hopefully mild) recession in 2012.

2. The US economy continues to muddle through yet again.

The US economy ended 2011 stronger than it started, although growth continues to be lackluster. Our view is that the deleveraging process will continue to limit growth to a sub-par rate, but that recession will continue to be avoided. A strong corporate sector, improving consumer sector, and financially strapped government sector will combine to give variable but positive growth for all four quarters of 2012, resulting in GDP growth of somewhere in the 2 to 2.5% range. Modest employment gains are key to reversing the steady decline in corporate and consumer confidence. Low interest rates, a bottoming process in housing and low inflation could aid the economy in its muddle-through. We also believe that European recession and fiscal policy drags will become important headwinds.

3. Despite slowing growth, China and India contribute more than half of the worlds economic growth.
Emerging market economic growth continues to be a critical part of global growth in both the short and long term. China and India are especially important given both their size and growth rates. And while growth in both countries is likely to be slower in 2012 than it was in 2011, together these two countries will account for more than half of 2012 global growth. We expect China will account for more than 40% of global growth, with India and the U.S. accounting for about 15% each. Until recently, increasing inflation in the emerging markets has caused policymakers to raise interest rates and/or reserve requirements in an attempt to slow inflation, with the effort of dampening growth. We expect that process will begin to reverse itself sometime in 2012.

4. US earnings grow moderately but fail to exceed estimates for the first time since the Great Recession.
One of the standouts of 2011 was the performance of corporate earnings. S&P 500 per share profits consistently beat expectations, increasing approximately 14% despite a relatively weak macroeconomic backdrop. This trend of surpassing expectations has been in place since the start of the economic recovery in 2009, but we believe the trend is nearing an end. Our view is that the pace of earnings growth will slow in 2012 and will fail to exceed expectations (currently $108) for the first time this business cycle. Comparisons are getting

tougher, the dollar has strengthened somewhat, profit margins are unlikely to climb further, and non-US growth is slowing. All of this points to acceptable, but not stellar, earnings reports.

5. Treasury rates rise and quality spreads fall.

Arguing for interest rate increases has been fruitless for some time as investors have been in a persistent risk off trading mode. Having said that, at some point we think the world will either move into an environment where deflationary pressures justify a very low interest rate structure, or one in which deflationary risks dissipate somewhat. We think the latter environment is more likely. If the crisis premium that has kept risk assets cheap and Treasury rates low lessens in 2012, Treasury rates are likely to move somewhat higher. That is indeed our premise with the European sovereign debt problem being the chief candidate for some improvement. Should that risk lessen, risk assets should perform better, which would include a reduction in credit spreads of all types. On a related note, we are not yet convinced that a QE3 program of size from the Fed is a given unless European credit markets freeze further and/or the US economy noticeably stumbles.

6. US equities experience a double-digit percentage return as multiples rise modestly for the first time since the Great Recession.
We are forecasting that earnings rise around 6% in 2012. Should that happen, and should stocks continue yielding somewhere around 2%, it would take only modest valuation improvements to reach double-digit return territory in 2012. We believe valuations are compressed for a host of risk concerns, most notably the risks associated with potential European financial contagion. After contracting by about 15% in 2011, we think valuations will expand modestly in 2012 as confidence improves on the back of acceptable, nonrecessionary economic growth, continued low inflation and interest rates, and modest net new job growth. Strong financial health in the corporate sector should provide some support as well. Importantly, as with many of our predictions, we do not believe that it will take a return to boom conditions for this one to come truesimply avoiding the nemesis scenario should be enough to allow for decent gains for US stocks.

7. US stocks outperform non-US markets for the third year in a row.

The US stock market has been a standout performer over the last two years compared with other equity markets. In 2011, US stocks were roughly flat and significantly outperformed non-US markets, many of which were down double-digit percentages. With reasonable earnings growth and attractive valuations, we think the United States can outperform again in 2012. That will require modest economic and earnings growth compared with recession in Europe and malaise in Japan. Emerging market underperformance has been significant largely due to monetary tightening stemming from inflation concerns which has resulted in economic slowdown. At some point, perhaps sometime during 2012, emerging market equities will resume outperformance, but we think it is too soon to make that call now.

8. Dividends and buybacks hit a record high.

Cash spent by US corporations to raise dividends and buy back stock increased approximately 35% in 2011. Despite that, cash as a percentage of profits used for these purposes is still below long-term averages. As a result, it is possible that the amount of cash used for these purposes grows by another 20% or more in 2012, which would surpass the record dividend increase and share buybacks set in 2007. On a related note, corporations used cash in 2011 for a significant number of acquisitions, an activity that is likely to continue in 2012 given low valuation levels and low cash returns.

9. Healthcare and energy outperform utilities and financials.

Our sector preferences include one defensive and one cyclical sector. Healthcare should benefit from continued good and predictable earnings growth coupled with reasonable valuations. Energy is our cyclical choice and is inexpensive relative to its history, the overall market, and oil prices. Financials have been a significant underperformer for several years and at some point may have a rally, but probably not quite yet. Our underweight position stems from continued concerns regarding revenue growth potential, regulatory risks and deteriorating and residual credit concerns. Finally, we believe utilities are overvalued, especially given weak earnings prospects.

10. Republicans capture the Senate, retain the House and defeat President Obama.
Predicting elections is always treacherous and assessing the impacts is even more precarious. At this stage, our view is there is a strong chance the Republicans retain the House of Representatives while losing a few seats, a reasonable chance they capture the Senate and, while a very different call, win the Presidency. The last part of this prediction is especially difficult given the Presidents advantage of incumbency and campaign war chest and the uncertainty as to the eventual Republican nominee. Critical to the Presidents reelection chances are his approval ratings and the unemployment rate, neither of which are currently in his favor. From a markets perspective, we would point out that, historically, equity returns have been strongest under Republican control of Congress regardless of the Presidents party.

The 2011 Scorecard Doll also offered a scorecard recapping his year-ago predictions for 2011. 2011 was a frustrating, volatile, and disappointing year for most investors, Doll said. As the year began, expectations focused on continuing economic recovery around the world from the Great Recession of 2009, despite ongoing deleveraging and residual debt and credit concerns. Yet, a series of shocks ensued, including the social and political upheaval of the Arab Spring resulting in a damaging oil price rise; the devastating earthquake, tsunami and nuclear power crisis in Japan, and the near collapse of the eurozone. The US equity market, finishing the year flat, was a notable outperformer, while emerging and European equities fell by double-digit percentages, Doll said. Job growth improved and unemployment fell, but both by disappointing amounts. For 2011, seven of Bob Dolls predictions were correct, which, as Doll states, is right in line with our long-term average of between seven and eight. 1. US growth accelerates as US real GDP reaches a new all-time high. SCORE = CORRECT
Several months ago it would have been nearly impossible to imagine that this prediction would have come true, but as the year drew to a close it appeared that this did, in fact, come to pass. Growth was at a near-zero stall point in the first quarter of the year and accelerated noticeably each subsequent quarter. At this point, it looks as if the fourth quarter of the year will see GDP growth come in at around 3%. Additionally, on a real basis, GDP did reach a new high in the middle of the year.

2. The US economy creates 2 million to 3 million jobs in 2011 as unemployment falls to 9%. SCORE = HALF-CORRECT
Although jobs growth accelerated significantly in 2011 when compared to 2010, this prediction is one well have to mark as only half-correct for the year given that the overall pace of growth was less than we had expected. Final numbers will be available in early January, but at this point it looks as if net jobs growth for the year was around 1.5 million. Unemployment did fall below 9% during the course of the year, but remains stubbornly high.

3. US stocks experience a third year of double-digit percentage returns for the first time in over a decade as corporate earnings reach a new all-time high. SCORE = HALF-CORRECT
This is another half-correct prediction. As we discussed earlier, earnings surpassed expectations yet again in 2011 and reached a new high in 2011. Regarding the other half of this prediction, equities obviously did not experience double-digit gains, but we are forecasting that they do so in 2012.

4. Stocks outperform bonds and cash. SCORE = HALF-CORRECT

This prediction came down to the final day of the year since, rather amazingly, the S&P 500 finished the year exactly where it began in point terms, and delivered modestly positive results on a total return basis. Although persistently low interest rates helped bonds outperform stocks in 2011, equities did manage to outperform the 0% return that cash has been delivering.

5. The US stock market outperforms the MSCI World Index. SCORE = CORRECT
This prediction came true by a wide margin. While US stocks were roughly flat, that was a significantly better result than what happened in non-US markets, many of which were down in double-digit territory.

6. The United States, Germany and Brazil outperform Japan, Spain and China. SCORE = CORRECT
Thanks mostly to the relative strength of US stocks, this prediction also came true. Brazil was the worst-performing market of this group, but Germany, Japan, Spain and China all also delivered disappointing market results in 2011.

7. Commodities and emerging market currencies outperform the dollar, euro and yen. SCORE = HALF-CORRECT
Commodities were somewhat mixed in 2011, with some areas of the market such as agriculture-related commodities producing negative results. The most visible sectors of the

commodities market, oil and gold, were both up for the year and helped the first half of this prediction come true. Emerging markets currencies, however, underperformed for the year.

8. Strong balance sheets and free cash flow lead to significant increases in dividends, share buybacks, mergers and acquisitions (M&A) and business reinvestment. SCORE = CORRECT
Despite the relatively weak economy, corporations continued to perform well in 2011, which helped promote high levels of dividend growth, share buybacks, business reinvestment and M&A activity. As we indicated earlier, these are trends that we believe will carry over to 2012 as well.

9. Investor flows move from bond funds to equity funds. SCORE = INCORRECT
This is one we were very wrong on. Given the flight-to-quality trade that dominated 2011, bond funds saw greater inflows than did equities.

10. The 2012 presidential campaign sees a plethora of Republican candidates while President Obama continues to move to the center. SCORE = CORRECT
This past year saw a number of GOP candidates announce their intention to run and it has been a relatively crowded field. On the other side, President Obama has been taking a more partisan approach in recent months, but for most of 2011 he adopted a relatively centrist stance.

Final 2010 Scorecard: Correct: 5 Half-Correct: 4 Incorrect: 1 Total: 7 out of 10 Opportunities for Investors Given Dolls forecasts for 2012, he also outlined some suggested areas of investment focus for the New Year: Shift to equity overweights: We have said it several times, but it bears repeating: as long as the world manages to slog along in a slow-growth environment, stocks should outperform in 2012, given the combination of decent earnings, low interest rates and attractive valuations. As such, we would recommend moving to overweight positions in equities relative to cash and bonds. Stick with free cash flow and dividend growth: Our main investment theme for 2012 is a focus on free cash flow that would allow companies to put their cash to work. While many are talking about the attractiveness of dividend payers, we would add an important

nuance: it is not dividend payments themselves that are attractive, but the quality of those dividends and the ability to grow them that investors should seek out. Focus on US stocks: As was the case in 2011, we expect 2012 to be a year in which US stocks outperform international markets. Economic growth should continue to be better in the United States compared with other developed markets and while our longterm view of emerging markets remains a positive one, we are not convinced that the near-term underperformance trend of those markets is yet at an end. Rotate to attractive areas of the market: As we discussed earlier, from a sector perspective, we favor healthcare and energy and have a less positive view toward financials and utilities. From a style perspective, we have a slight preference for growth over value and are neutral regarding capitalization trends. Expect further divergence of returns: For some time, markets have been trading in a risk on/risk off fashion and we expect that these trends will diminish as investor sentiment improves. This suggests that we will see heightened dispersion between the winners and the losers in 2012, meaning that security selection will become more critical. About BlackRock BlackRock is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. At September 30, 2011, BlackRocks AUM was $3.345 trillion. BlackRock offers products that span the risk spectrum to meet clients needs, including active, enhanced and index strategies across markets and asset classes. Products are offered in a variety of structures including separate accounts, mutual funds, iShares (exchange-traded funds), and other pooled investment vehicles. BlackRock also offers risk management, advisory and enterprise investment system services to a broad base of institutional investors through BlackRock Solutions. Headquartered in New York City, as of September 30, 2011, the firm has approximately 10,200 employees in 27 countries and a major presence in key global markets, including North and South America, Europe, Asia, Australia, and the Middle East and Africa. For additional information, please visit the Company's website at www.blackrock.com. About The BlackRock Investment Institute The BlackRock Investment Institute is a global platform that leverages BlackRock's expertise in markets, asset classes, and client segments. Launched in 2011, the Institute's goal is to produce information that makes BlackRock's portfolio managers better investors and helps deliver positive investment results for our clients. Issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Services Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: 020 7743 3000. Registered in England No. 2020394. For your protection telephone calls are usually recorded. BlackRock is a trading name of BlackRock Investment Management (UK) Limited.

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Restricted Investors This document is not, and under no circumstances is to be construed as an advertisement or any other step in furtherance of a public offering of shares in the United States or Canada. This document is not aimed at persons who are resident in the United States, Canada or any province or territory thereof, where the companies/securities are not authorised or registered for distribution and where no prospectus has been filed with any securities commission or regulatory authority. The companies/securities may not be acquired or owned by, or acquired with the assets of, an ERISA Plan. Risk Warnings Investment in the products mentioned in this document may not be suitable for all investors. Past performance is not a guide to future performance and should not be the sole factor of consideration when selecting a product. The price of the investments may go up or down and the investor may not get back the amount invested. Your income is not fixed and may fluctuate. The value of investments involving exposure to foreign currencies can be affected by exchange rate movements. We remind you that the levels and bases of, and reliefs from, taxation can change. BlackRock has not considered the suitability of this investment against your individual needs and risk tolerance. The data displayed provides summary information, investment should be made on the basis of the relevant Prospectus which is available from your Broker, Financial Adviser or BlackRock Advisors (UK) Limited. We recommend you seek independent professional advice prior to investing. In respect of the products mentioned this document is intended for information purposes only and does not constitute investment advice or an offer to sell or a solicitation of an offer to buy the securities described within. This document may not be distributed without authorisation from BlackRock Advisors (UK) Limited. The opinions presented are those of Bob Doll, BlackRock Chief Equity Strategist for Fundamental Equities, as of January 5, 2012 and may change as subsequent conditions vary. Individual portfolio managers for BlackRock may have opinions and/or make investment decisions that may, in certain respects, not be consistent with the information contained in this press release. This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all inclusive and are not guaranteed as to accuracy. Past performance does not guarantee future results. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. 2012 BlackRock, Inc. All Rights Reserved.

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