PANews reported on November 5th that the Monetary Authority of Singapore (MAS) warned that high valuations in the technology sector pose a potential risk. In its annual Financial Stability Assessment report released Wednesday, the MAS stated, "Valuations in some equity markets are relatively high, particularly in the technology and artificial intelligence sectors… If market optimism regarding sufficient future returns from artificial intelligence declines, it could trigger a broader market correction and lead to more defaults in the private lending market." The MAS pointed out that much of the stock market's gains have been driven by AI-related investments, significantly increasing many investors' exposure to the information technology sector. Some large technology companies are using new, and potentially even revolving, private financing structures to support expansion, putting greater revenue pressure on some AI companies. The continued divergence between stock market valuations and downside risks to economic growth means that a shock could lead to disorderly market adjustments.PANews reported on November 5th that the Monetary Authority of Singapore (MAS) warned that high valuations in the technology sector pose a potential risk. In its annual Financial Stability Assessment report released Wednesday, the MAS stated, "Valuations in some equity markets are relatively high, particularly in the technology and artificial intelligence sectors… If market optimism regarding sufficient future returns from artificial intelligence declines, it could trigger a broader market correction and lead to more defaults in the private lending market." The MAS pointed out that much of the stock market's gains have been driven by AI-related investments, significantly increasing many investors' exposure to the information technology sector. Some large technology companies are using new, and potentially even revolving, private financing structures to support expansion, putting greater revenue pressure on some AI companies. The continued divergence between stock market valuations and downside risks to economic growth means that a shock could lead to disorderly market adjustments.
The Monetary Authority of Singapore (MAS) has warned that the technology sector is overvalued and could trigger a sharp correction in global markets.
PANews reported on November 5th that the Monetary Authority of Singapore (MAS) warned that high valuations in the technology sector pose a potential risk. In its annual Financial Stability Assessment report released Wednesday, the MAS stated, "Valuations in some equity markets are relatively high, particularly in the technology and artificial intelligence sectors… If market optimism regarding sufficient future returns from artificial intelligence declines, it could trigger a broader market correction and lead to more defaults in the private lending market." The MAS pointed out that much of the stock market's gains have been driven by AI-related investments, significantly increasing many investors' exposure to the information technology sector. Some large technology companies are using new, and potentially even revolving, private financing structures to support expansion, putting greater revenue pressure on some AI companies. The continued divergence between stock market valuations and downside risks to economic growth means that a shock could lead to disorderly market adjustments.
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