The chief executive of DBS, Southeast Asia’s largest bank, has cautioned investors to prepare for continued turbulence in global markets, citing stretched valuations in U.S. equities and growing dependence on a handful of major technology stocks.
“We’ve seen a lot of volatility in the markets. It could be equities, it could be rates, it could be foreign exchange,” said DBS CEO Tan Su Shan in an interview with CNBC. “I expect that volatility to continue.” Tan, who succeeded longtime chief executive Piyush Gupta in March, pointed to investor unease surrounding the high valuations of artificial intelligence-linked stocks, particularly the so-called “Magnificent Seven” — Amazon, Alphabet, Meta, Apple, Microsoft, Nvidia, and Tesla.
According to Tan, the heavy concentration of capital in those seven companies—representing trillions of dollars in market value—makes the risk of a correction almost unavoidable. “With that kind of concentration, there will be worry about when this bubble will burst,” she said.
Speaking at the Global Financial Leaders’ Investment Summit in Hong Kong, Tan projected a potential 10% to 20% market drawdown over the next 12 to 24 months. Her comments aligned with those of Morgan Stanley CEO Ted Pick, who described market pullbacks as “healthy” rather than crisis indicators. Tan agreed, adding that “frankly, a correction will be healthy.”
Recent trading activity has supported her warning. Despite stronger-than-expected earnings from Advanced Micro Devices and Palantir, both companies saw share price declines on Tuesday, contributing to a broader fall in the Nasdaq index. Tan’s outlook also echoes warnings from the International Monetary Fund, Federal Reserve Chair Jerome Powell, and Bank of England Governor Andrew Bailey, who have each highlighted concerns about inflated stock prices.
Addressing investment strategy, Tan urged diversification across geographies and sectors. “Whether it’s in your portfolio, in your supply chain, or in your demand distribution, just diversify,” she said.
Tan also emphasized Singapore’s role as a diversification hub, citing its transparency, rule of law, and political stability. She described the city-state as a “diversifier market,” adding that the Monetary Authority of Singapore has been working to increase global interest in local markets. “We’re a transparent, open financial system and stable politically. We’re a good place to invest,” she said.
Featured image credits: Gilbert Chua via TED
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