‘Buckle up, we’re in for a volatile ride’

As valuations in the US stock market stretch further, the CEO of Southeast Asia’s largest bank is warning investors to expect turmoil ahead.

“We’ve seen a lot of volatility in the markets. It could be in stocks, it could be in interest rates, it could be in foreign exchange.” DBS CEO Tan Su Shan told CNBC, adding that she expects this volatility to continue.

Tan, who took over the helm of DBS from long-time CEO Piyush Gupta in March, said investors were particularly concerned about the lofty valuations of AI stocks, especially the so-called “Great Seven”.

The great seven – Amazon, alphabet, dead, apple, Microsoft, Nvidia and Tesla – are some of the major US technology and growth stocks that have led much of Wall Street’s gains in recent years.

“You have trillions of dollars tied up in seven stocks, for example. So inevitably, with that kind of focus, there’s going to be anxiety about it. ‘You know, when is this bubble going to burst?’

Earlier this week, at the Global Financial Leaders Investment Summit in Hong Kong, There was likely to be a 10%-20% drawdown over the next 12 to 24 months.

Ted Beck, CEO of Morgan Stanley, said at the same summit that investors should welcome cyclical withdrawals, calling them healthy developments rather than signs of a crisis.

Tan agreed. “Frankly, a correction would be healthy,” she said.

Recent examples include Advanced micro devices and Palantirand both were published Stronger than expected Quarterly results on Tuesday, so far Their shares – and the broader Nasdaq – fell.

Her statements come in the wake of similar warnings before International Monetary Fund and Heads of the central bank Jerome Powell and Andrew Bailey, all of whom warned of stock price inflation.