Managing director on rotation, Asian markets, and FX (with Heidi Stroudwatt, Shery Ahn)

Asks whether the rotation out of tech is sustainable given high valuations and concentration.

Heidi Stroudwatt

George Boubouras

The broadening out trade is real. AI earnings are extraordinary and justify multiples. The rotation into mid-caps, utilities, healthcare, and financials is logical and consistent.

There is crowding out of finite capital in the equity part of the investment. Debt issuance is dominated by chipmaking and AI.

Asks about the pipeline of mega AI IPOs (SpaceX, OpenAI, Anthropic) and whether they test liquidity.

Heidi Stroudwatt

George Boubouras

Upcoming IPOs will continue the historical trend of increasing equity participation. The whole globe is all-in on US equities and AI chipmaking. Diversification is happening and will attract more capital.

The debt issuance platform is dominated by that sector, at the cost of sovereign and municipal issuance.

Asks about diversification across Asian markets, noting that Indonesia and India are underperforming.

Shery Ahn

George Boubouras

Prefers Nikkei, KOSPI on retracement, Singapore, and Australia. Short Indonesia due to capital flight and lack of reform. Underweight India due to lack of broad-based reform and access to tech earnings.

Indonesia's weakening currency benefits tourism but not investment. India needs more economic reform.

Asks about the outlook for Asian currencies, especially the yen at 160 and the won past 1500.

Shery Ahn

George Boubouras

Structural weakness for the yen with pockets of intervention. Expects a weaker yen this time next year. The BOJ wants to deliver higher nominal rates but structural weakness persists.

Intervention at 159-160 gets it to 156, then it weakens again. More pockets of volatility are the norm for active managers.

SignalTube