Bloomberg Professional Services
That balance between adaptation and discipline framed the summit’s opening keynote, where Jeffrey Jaensubhakij, Advisor to GIC, dissected a market suspended between exuberance and fragility.
Jeffrey noted that markets have entered a rare phase where both risky and safe-haven assets are rallying together — an outcome of aggressive monetary easing and expansionary fiscal policy that has lifted nearly all asset classes. Yet such a balance, he cautioned, is inherently unstable: eventually, one side of the trade will have to give in, ushering in renewed volatility.
Valuations have reached levels few imagined possible, raising doubts over whether rapid rate cuts by major central banks truly support earnings growth or simply inflate prices toward a sharper correction.
In assessing whether both risk and safe-haven trades could fail together, Jeffrey offered a two-part view. First, most global portfolios remain heavily tilted toward the AI-driven equity trade, with only a fractional exposure to havens like gold. If investors are forced to sell, they’ll offload where they’re most exposed — making those positions more vulnerable to correction. Second, gold’s resilience, he noted, reflects the belief that if markets falter, central banks will again step in with “QE to the power of X,” cushioning havens even as risk assets unwind.
He highlighted that the AI trade indeed rests on real revenue growth, but also demands ever-larger capital expenditures that may not be sustainable. Suppliers of the “picks and shovels” of the boom — chips, infrastructure, and computing power — face rising investment and energy costs that could outpace returns.
Still, he emphasized, much of today’s spending will find productive use over time; the real risk lies in the interim, when those who financed the most expensive rounds may face losses before long-term gains emerge. His caution was clear: avoid being the ones funding the “last round” of the boom.
For allocators, his remarks underscored market mastery through disciplined, data-driven risk calibration — the kind Bloomberg’s cross-asset analytics and scenario tools enable.