By Faith Hung

TAIPEI (Reuters) - BlackRock Inc <BLK.N>, the world's biggest asset manager, expects many countries to impose capital controls on "hot money" and sees the foreign fund flows to Asia that have pushed up regional currencies continuing for the next six months.

Any controls, however, would have little impact on stocks and real estate markets, because fund inflows are seen as a positive factor for investment returns and are likely to extend the recent rally in stocks, said Chang Lin-yun, the Asia ex-Japan retail head and Taiwan country chief of BlackRock, which manages more than $3 trillion in assets.

"There is simply too much hot money coming in Asia. Many countries will impose capital controls, but the impact could be limited based on what had happened in the past," he said at a media event marking BlackRock's acquisition of a small Taiwan fund firm PrimAsia.

To stop their economies from overheating and defend their exporters, some emerging governments have moved to stem the rise of their own currencies, sparking talk of a brewing "currency war."

South Korea's President Lee Myung-bak warned on Monday that a failure by G20 economies to find a solution soon to disputes about foreign exchange policy could cause significant problems for the world economy.

"It is difficult to reverse the falling trend of the U.S. dollar, prompting funds to chase markets that offer higher returns," said Chang.

A stronger local currency and corporate earnings growth will help Asian stocks to continue their momentum.

"Most Asian shares are still reasonable even after the rally we've seen in September and October," Chang said. "Investors have underestimated future corporate earnings a lot," he said, adding that BlackRock favors China and India stocks.

"India will be the next story for infrastructure," said Chang.

The U.S. firm has completed its acquisition of a small Taiwan fund firm, PrimAsia, and was bullish about the growth potential of Asian and Taiwan markets, Chang said.

"The fund industry in Taiwan and across Asia has been experiencing amazing growth," he said. "We will bring Taiwan's vibrant capital markets to the international investors via BlackRock's global platform."

The Asia ex-Japan mutual fund market will grow over 70 percent in the next four years, while growth in Taiwan is expected to be around 60 percent during the same period, BlackRock said, citing estimates from research firm Cerulli Associates.

(Editing by Jonathan Standing)