Reporter: Cai Ding Editor: Lan Suying
On Tuesday, October 24th local time, the 7th Future Investment Initiative (FII) Summit, known as "Davos in the Desert," opened in Riyadh, Saudi Arabia. This three-day summit attracted approximately 6000 representatives from over 90 countries and regions.
At the roundtable forum on the opening day, Rui Dalio, founder of Bridgewater Fund, Jamie Damon, CEO of JPMorgan Chase, Larry Fink, Chairman and CEO of BlackRock, Fan Jieen, CEO of Citigroup, Qi Yaonian, CEO of HSBC Group, Su Shimin, founder of Blackstone Group, Shen Nanpeng, founder and executive partner of Sequoia China More than ten global financial leaders, including Goldman Sachs Chairman and CEO David Solomon, held in-depth discussions on the impact of tightening monetary policies by major central banks around the world and future investment opportunities.
Damon and Dalio: Stay cautious about the economic outlook
At a roundtable hosted by David Rubinstein, co-founder of Carlyle Group, Bridgewater CEO Dalio stated that he is "pessimistic" about the global economic outlook in 2024, with risk factors including high global public debt and geopolitical conflicts.
If we look at the time span of (high interest rates), we will see that (tightening) monetary policy has a greater impact on the world, so it is difficult to be optimistic about this, "said Dalio. He also added that the upcoming US election will revolve around irreconcilable differences in wealth and power.
Xiaomo CEO Damon expressed doubts about the ability of some countries to cope with inflation and global economic growth slowdown. Most people on Wall Street are concerned about whether the Federal Reserve may raise interest rates by another 25 basis points before the end of 2023. Damon recently warned that the US federal funds rate may rise to 7%, "which could be the most dangerous period in the world in decades
When it comes to the potential impact of rate hikes, Damon said, "I don't think another 25 basis points or more rate hike by the Federal Reserve will be any different from now. Regardless of whether the entire US Treasury yield will rise by 100 basis points in the future, people need to be prepared, although I don't know if this will really happen
BlackRock CEO Larry Fink stated that the Fed's approach of "having to maintain higher interest rates for a longer period of time" means that the economy may experience a soft or hard landing by 2025, but this will not happen in 2024.
Consensus on AI opportunities
Although Wall Street financial giants have made pessimistic remarks about the future global economy, there are also opportunities in the challenges.
Harvey Schwartz, CEO of Carlyle Group, said, "There will definitely be incredible opportunities in the next year. But overall, the risks will be even greater. As economies adapt to a high interest rate environment, the global market will face more challenges in the short term
Jenny Johnson, President and CEO of mutual fund giant Franklin Templeton, believes that private equity shares in the secondary market are an attractive area, as some private equity shares are being sold at a 30% discount due to the need for original investors to spin them off their balance sheets. Johnson added that similarly, the mortgage pools sold by regional banks may also bring substantial profits.
Participants also pointed out that emerging markets such as India, Vietnam, and Indonesia, as well as industries such as healthcare, traditional energy, and renewable energy, may also contain investment opportunities. In the long run, they unanimously believe that the opportunities in the field of artificial intelligence (AI) are infinite.
Investment bank Moelis& Ken Moelis, founder and CEO of Co., once said, "Artificial intelligence will bring disruptive changes, just like most technological advancements, which will greatly benefit the lives of most people
However, the big shots also made a "risk warning", stating that it is time to remain vigilant and cautious, as geopolitical uncertainty is injecting new risks into the global financial stock market. Harvey Schwartz believes that "pricing geopolitical risks is extremely difficult, but it must be included in risk assessment
Hani Enaya, CEO of Sanabil Investments, a subsidiary of the Saudi Arabian Public Investment Fund, also pointed out that "in the short term, we are very cautious about how to allocate assets
Harvey Schwartz further added, "Being cautious doesn't mean doing nothing, it just means you need to think carefully about how to allocate marginal funds, but I believe you will eventually see real good opportunities
Goldman Sachs CEO David Solomon is optimistic about the long-term trend of recovery. He said, "If you are a CEO and the prospects are uncertain, you tend to be cautious about major things that can change the trajectory of the business. But as companies become more certain about the environment, they must move forward, continue to integrate and expand in order to achieve effective competition