Home›Global Markets›Trade & Tariffs›Ex-World Bank official warns US market concentration c…

Ex-World Bank official warns US market concentration could trigger fallout

Ian Goldin said US-listed stocks and bonds still account for the majority of global listings, and a broad correction could hit investors worldwide.

Reported · Written up by our desk · Trade & Tariffs

A former World Bank official warned that global investors face heightened risk from the US market’s concentration, saying overly inflated valuations are biasing New York listings toward a small group of companies. Speaking at an event in Hong Kong, Ian Goldin said the valuations being applied to these firms are not supported by revenues on a commensurate basis, which he described as a worrying trend, according to SCMP Economy.

Goldin said it was unsurprising to see a recent correction in SpaceX’s valuation, calling it a predictable outcome of stretched market pricing. He added that the US economy is less than 20.0% of global gross domestic product, while more than 70.0% of globally listed equities and bonds remain concentrated in US markets, limiting investors’ ability to diversify away from US assets.

He cautioned that if a broad-market correction were to occur, the fallout would not be contained and would become increasingly global, with people around the world potentially suffering from the impact, SCMP Economy reported.

More like this

Sources