The Monetary Authority of Singapore warns that the valuation of the technology zone is too high, which may trigger a severe adjustment in the global market.

According to Deep Tide TechFlow news, on November 5, the Monetary Authority of Singapore warned that the high valuations in the tech zone pose potential risks. In the annual Financial Stability Assessment Report released by the Monetary Authority of Singapore on Wednesday, it stated, “Some stock market valuations are relatively high, especially in the tech and artificial intelligence zone… If market optimism about artificial intelligence generating sufficient future returns recedes, it could trigger severe adjustments across the broader stock market and lead to more defaults in the private sale credit market.” The authority pointed out that most of the stock market's rise is driven by AI-related investments, significantly increasing many investors' exposure to the information technology zone. Some large tech companies are using new, and possibly even cyclical, private sale financing structures to support expansion, putting some AI firms under greater revenue pressure. The disconnect between stock market valuations and the risks of economic growth continuing to decline means that once a shock occurs, the market could experience disorderly adjustments. (Jin10)