# Asia Equities Decline as AI Mania Fades

An episode of [Bloomberg Daybreak: Asia Edition](https://invisiblenetwork.ai/podcast/1663863437), 5 Jun 2026, 17 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/58e85be7-dbb5-4043-afed-af80014dc0b3/f521daff-a558-4a57-a842-b4600022cebc/audio.mp3?utm_source=Podcast&in_playlist=27143354-63aa-4ac5-965d-af80014dc0d3

Business and finance news from the Asia-Pacific. Asian stocks declined along with US equity-index futures as enthusiasm for the artificial intelligence trade cooled after driving markets to record highs this year. Stocks are pulling back from record highs as Broadcom Inc.'s outlook for AI-chip sales fell short of elevated expectations, pausing a blistering advance in semiconductor shares from their war-driven lows. Investors now face a crucial test on Friday with the US jobs report, which could reshape expectations for Federal Reserve policy and determine whether the AI-fueled rally broadens further or loses momentum. We speak to Winnie Hsu, Bloomberg's Asia Equities Reporter. And for more analysis on the markets, Bloomberg TV hosts Haidi Stroud-Watts and Shery Ahn spoke to George Boubouras, Head of Research and Managing Director at K2 Asset Management. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
[0:10] Speaker 2: Welcome to the Daybreak Asia podcast. I'm Doug Prisner. In
[0:13] Speaker 2: the US stock market, on Thursday, we had a rotation
[0:16] Speaker 2: away from semiconductor stocks and into both financial and healthcare issues. Now,
[0:21] Speaker 2: the chip makers struggled under the weight of Broadcom's underwhelming outlook,
[0:25] Speaker 2: and that stock on Thursday was down nearly thirteen percent.
[0:29] Speaker 2: And if you're wondering, the Philadelphia Semiconductor Index was down
[0:32] Speaker 2: by more than two percent. However, on the positive side,
[0:35] Speaker 2: United Health Group was up more than five percent. Goldman
[0:38] Speaker 2: Sachs also up by more than five percent. Both of
[0:41] Speaker 2: those are Dow components, and that helped to send the
[0:44] Speaker 2: industrial average to a record high fifty one thousand and
[0:47] Speaker 2: five sixty one. To help us understand what's happening in
[0:50] Speaker 2: equity markets across the APAC region, let's bring in Bloomberg's
[0:53] Speaker 2: Winnie Sue. Winnie is our Asia equities reporter. She joins
[0:57] Speaker 2: us from Singapore. Thank you for being here. Can we
[1:00] Speaker 2: start by talking about what you see happening in South Korea,
[1:04] Speaker 2: particularly the pressure that some of the memory chip makers
[1:07] Speaker 2: are being hit with today.
[1:10] Speaker 3: Yeah, exactly. You can see that we're looking at COSPY
[1:13] Speaker 3: here down about five percent, and as you just mentioned,
[1:16] Speaker 3: it's a lot being dragged by these the two big
[1:20] Speaker 3: chip makers because you know, they account for half of
[1:24] Speaker 3: the overall costb waiting. So when things move, it really
[1:28] Speaker 3: moves big. And as you're looking at just how the
[1:32] Speaker 3: market has been, especially how far the rally has run
[1:36] Speaker 3: for AI chips, just a bit of a disappointment when
[1:41] Speaker 3: it comes to the broadcom results can really prompt people
[1:44] Speaker 3: to start taking some more profit from this rally.
[1:47] Speaker 2: So there are chip makers in Japan, but I don't
[1:50] Speaker 2: see the nick under the same level of pressure. And
[1:52] Speaker 2: to your point that Samsung and sk Heinix make up
[1:57] Speaker 2: a large part of what we see reflected in the COSTBA,
[2:00] Speaker 2: So what's going on with some of the chip makers
[2:01] Speaker 2: in Japan.
[2:03] Speaker 3: Yeah, So interestingly we are seeing a bit of a
[2:06] Speaker 3: catch up there actually, as this AI rally really broadens
[2:11] Speaker 3: and investors are looking for opportunities outside of the megacaps
[2:15] Speaker 3: ups up outside of Samsung, Heinez and TSMC and further
[2:21] Speaker 3: down the supply chain that can benefit. And this is
[2:24] Speaker 3: where these Japanese names come in, because Japan actually have
[2:29] Speaker 3: a very good selection of these AI names that are
[2:34] Speaker 3: essential for the supply chain and even dominating the market.
[2:38] Speaker 3: So for example, you have the likes of the makers
[2:41] Speaker 3: of MLCCs, just the Japanese names Tayo Yuden and Murada.
[2:45] Speaker 3: They were both up some hundred percent in the past month,
[2:49] Speaker 3: and these two companies pretty much dominate this market. So
[2:54] Speaker 3: Japan actually has a lot of essential AI related manufacturers
[3:01] Speaker 3: and that include, for example, the makers of the MLCCs.
[3:05] Speaker 3: You have Taio, Juden and Murada both seeing stocks jumping
[3:10] Speaker 3: one hundred percent in the past month, So you can
[3:12] Speaker 3: see that investors are starting to notice these hidden names
[3:16] Speaker 3: or hidden gems in Japan. And beyond that, you also
[3:20] Speaker 3: have the non AI names that are also really shining
[3:25] Speaker 3: as well. You have the banks that are rising on
[3:29] Speaker 3: the expectation for the Bank of Japan to hike rates.
[3:31] Speaker 3: And also still the trading house is doing quite well
[3:34] Speaker 3: because they have been Warren Buffett's favorites. So very diverse
[3:38] Speaker 3: offerings from the Japanese market.
[3:41] Speaker 2: I'm glad you mentioned the BOJ because we had some
[3:43] Speaker 2: very hot wage data for Japan earlier today. Labor cash
[3:48] Speaker 2: earnings up at an annual rate of three and a
[3:50] Speaker 2: half percent, which was more than the market had been expecting,
[3:54] Speaker 2: and real cash earnings up at a rate annual rate
[3:56] Speaker 2: of one point nine percent, also head of forecast. So
[4:00] Speaker 2: is it a foregone conclusion that we're going to get
[4:02] Speaker 2: a raid hike at the next policy meeting from the.
[4:04] Speaker 3: BOJ Yeah, pretty much. I mean you just mentioned the
[4:08] Speaker 3: wage data actually being quite supportive, but just yesterday we've
[4:11] Speaker 3: also learned that the Bank of Japan's officials are most
[4:16] Speaker 3: likely going to be discussing a quarter percentage point hike
[4:22] Speaker 3: in this upcoming meeting, and even considering potentially another one
[4:27] Speaker 3: later down this year. So it really are several factors
[4:32] Speaker 3: that they are considering, but one that's being highlighted is
[4:36] Speaker 3: that they are seeing the pressure from prices, the upside
[4:41] Speaker 3: risks for prices to raise to rise further, really outweighing
[4:47] Speaker 3: the potential impact on the economy. And also we have
[4:51] Speaker 3: the yen still very weak, hovering around just one hundred
[4:55] Speaker 3: sixty level against the dollar. People are also very closely
[4:59] Speaker 3: watching out for the intervention risks, So you put that
[5:03] Speaker 3: together with the price pressure the weak yen, I'm pretty
[5:07] Speaker 3: much supportive of a hike to come, but it's just
[5:11] Speaker 3: how hawkish it could be.
[5:12] Speaker 2: So you were just in Japan last week, you're in Singapore,
[5:15] Speaker 2: You're normally in Hong Kong, so you travel quite a bit.
[5:18] Speaker 2: I get that. And we've been talking a lot about
[5:20] Speaker 2: these mega IPOs in the US, whether we're talking about SpaceX,
[5:24] Speaker 2: whether we're talking about anthropic or open AI. And I'm
[5:28] Speaker 2: curious about the conversation that you've been hearing when it
[5:32] Speaker 2: centers around the big IPOs in the US, particularly given
[5:36] Speaker 2: the fact that everything is a part of the AI narrative.
[5:39] Speaker 2: I mean, are people feeling that there is a little
[5:43] Speaker 2: bit more room to run in terms of what's been
[5:45] Speaker 2: happening with artificial intelligence, or are people thinking that maybe
[5:50] Speaker 2: what's happening in the US equity market is a little
[5:53] Speaker 2: bit over extended. What is the perspective from the Asia Pacific?
[5:58] Speaker 3: Yeah, so first of all, these are really big IPOs
[6:02] Speaker 3: that we're talking about and can potentially be the next
[6:05] Speaker 3: tailwind for the suppliers in Asia. So that is the
[6:10] Speaker 3: positive side. You know, when I talk to strategists. For example,
[6:13] Speaker 3: the strategists at IG International was estimating that this can
[6:18] Speaker 3: potentially translate to about sixty billion dollars of further AI
[6:24] Speaker 3: kpex on top of what is already being estimated from
[6:29] Speaker 3: all these big hyperskaters. So if we have these funds
[6:33] Speaker 3: raised by the IPOs translating into further spending in AI,
[6:37] Speaker 3: that can of course trickle down further to benefit the
[6:41] Speaker 3: likes of you know, the suppliers, the supply chains in Asia,
[6:47] Speaker 3: and we're hearing a bit more tie up, whether it's
[6:50] Speaker 3: between SpaceX and Taiwan's Media tex so these also come
[6:55] Speaker 3: through to support these names. However, interesting on the flip side,
[6:59] Speaker 3: when you just look from the flow perspective instead of
[7:03] Speaker 3: the supply chain, we're hearing actually a bit more concern
[7:08] Speaker 3: for how the money might actually leave the likes of
[7:12] Speaker 3: South Korean market and to be poured into investing into
[7:18] Speaker 3: these IPOs or these listed stocks to come. So that
[7:23] Speaker 3: was actually an interesting concern that we're hearing for the
[7:27] Speaker 3: Asian market. We just mentioned how people are paying more
[7:30] Speaker 3: attention on their AI names, but there are also other
[7:34] Speaker 3: factors to consider, whether it's how less concentrated the market is,
[7:40] Speaker 3: or how they have still these structural tailwinds when it
[7:43] Speaker 3: comes to the corporate governance, and just overall how less
[7:47] Speaker 3: volatile they are.
[7:48] Speaker 2: WHENNIE, it is always a pleasure I hope the next
[7:51] Speaker 2: time you and I catch up here in Hong Kong,
[7:53] Speaker 2: Save travels. Bloomberg's Winnie Sue, who covers Asian equities for
[7:57] Speaker 2: US today, joining from Singapore here on the Daybreak Asia podcast.
[8:08] Speaker 2: Welcome back to the Dabreak Asia Podcast Time Doug Chrisner.
[8:11] Speaker 2: Asian equities are drifting lower as these markets grapple with
[8:15] Speaker 2: a pullback in semiconductor shares in the US session, and
[8:19] Speaker 2: that's where we begin our conversation with George Barboris. George
[8:22] Speaker 2: is head of Research. He's also a managing director at
[8:25] Speaker 2: K two Asset Management. He spoke with Bloomberg TV host
[8:28] Speaker 2: Heidi Stroudwatts and Cherry on there's.
[8:32] Speaker 4: So many sort of cross currents as to what's going
[8:34] Speaker 4: on at the moment. But let me get you started
[8:36] Speaker 4: on the tech view. Is this a true sustainable rotation
[8:41] Speaker 4: that you think we're starting to see given so many
[8:43] Speaker 4: questions have been asked about the concentration of this rally
[8:47] Speaker 4: and the loftiness evaluations.
[8:51] Speaker 5: Yes, good morning, good to be with you. Yes, we
[8:53] Speaker 5: believe the broadening out. It's the trade we like that
[8:58] Speaker 5: many active managers last year earlier this year broadening out
[9:01] Speaker 5: looking for that opportunity from AI, the tech sector with
[9:05] Speaker 5: the benefits of productivity and utilities, healthcare, broadly, financials and
[9:10] Speaker 5: other parts of the economy. So we are looking at
[9:12] Speaker 5: that MidCap broadening out, and obviously the other key sector
[9:15] Speaker 5: is now with the concentration. The thing to reinforce here,
[9:20] Speaker 5: this is an extraordinary time, I think in financial market history.
[9:23] Speaker 5: But these earnings have been so significant and historical. The
[9:28] Speaker 5: E is coming through the denominator and the P is
[9:31] Speaker 5: just matching it, so just the reinforces that it is
[9:33] Speaker 5: extraordinary what's happened. But these earnings are extraordinary. There is
[9:38] Speaker 5: while you can't say there's crowding out within the private sector,
[9:41] Speaker 5: that's really a public private sector debate. But within the
[9:44] Speaker 5: private sector there is this concentrated concentration of finite capital
[9:48] Speaker 5: gun to the equity part of that investment and obviously
[9:51] Speaker 5: all parts of the capital structure, because the issuance are
[9:53] Speaker 5: dominated again by chip making and AI and obviously equity returns.
[9:58] Speaker 5: But the earnings are coming through, they are historically high.
[10:02] Speaker 5: It is matching the piece, so the multiples are justified
[10:05] Speaker 5: on this extraordinary earnings. Therefore, having said all of that,
[10:10] Speaker 5: it seems logical and consistent that that broadening out has
[10:14] Speaker 5: got some benefits for their broader economy and that productivity
[10:18] Speaker 5: gain that you're looking for in the US and other
[10:19] Speaker 5: parts of the world. So hopefully that narrative makes a
[10:22] Speaker 5: bit of a sense from an investment point of view.
[10:27] Speaker 4: George, what are your thoughts when it comes to this
[10:29] Speaker 4: pipeline of mega tech and largely AI centered IPOs right,
[10:33] Speaker 4: obviously SpaceX open to AI anthropy. Before that, we also
[10:37] Speaker 4: have the massive fundraising by Google. Do you think it's
[10:41] Speaker 4: meaningful for markets in terms of being a teste of
[10:43] Speaker 4: liquidity of invested commitment to the theme.
[10:50] Speaker 5: Yes, and short and just reinforcing the following the upcoming IPOs.
[10:55] Speaker 5: It's going to continue the trend that is quite historical,
[10:58] Speaker 5: and that is equity participate agents increasing. The whole globe
[11:01] Speaker 5: is all in on US equities and USAI and US
[11:05] Speaker 5: chip making, and those earnings that are coming through. The
[11:09] Speaker 5: whole debt issuance platform is dominated by that sector at
[11:14] Speaker 5: the cost of possibly sovereigns and some municipals, but definitely
[11:18] Speaker 5: other senior unsecured debt issuance. So there is again reinforcing
[11:22] Speaker 5: finite capital in the top part of the capital structure
[11:25] Speaker 5: to the bottom has been allocated to the sector. The
[11:29] Speaker 5: diversification is happening, has been happening for six months or
[11:32] Speaker 5: so and some even longer for some, but it's going
[11:35] Speaker 5: to attrack more new capitals as chasing this or the
[11:38] Speaker 5: VATA component. So this trend seems to continue for now
[11:42] Speaker 5: and many active managers will continue to take some profit
[11:46] Speaker 5: where they can and again do the broadening out trade
[11:49] Speaker 5: to the MidCap broaden out trade to the other sectors
[11:52] Speaker 5: or other asset classes for that matter.
[11:57] Speaker 1: We of course have these markets across a that are
[12:00] Speaker 1: very heavily concentrated on big tech names, and then at
[12:04] Speaker 1: the same time we have the ones that don't have
[12:06] Speaker 1: that much tech exposure that have lagged behind this incredible
[12:10] Speaker 1: rally that we're seeing globally. Could we see any more
[12:13] Speaker 1: diversification of broadning out in terms of different market regions,
[12:17] Speaker 1: because we have seen the likes of saying Indonesia, the
[12:20] Speaker 1: likes of India for example, being some of the worst
[12:22] Speaker 1: markets performers right now.
[12:26] Speaker 5: Yeah, no good to highlight though. So from our perspective
[12:30] Speaker 5: on retlacement, we like nick Eye, we like Cosby. It's
[12:33] Speaker 5: been a real volatile run with the Cosby and that
[12:36] Speaker 5: rally has been historical year. Today. We like Singapore as
[12:39] Speaker 5: at Hub and Australia because it's got that large early
[12:42] Speaker 5: gopalistic earnings coming through the high payout ratios and the
[12:45] Speaker 5: difference coming through specifically in Indonesia that it continues to
[12:49] Speaker 5: be a short for Indonesia, that currency weakening flight of capital.
[12:53] Speaker 5: That just need to get reform consistently. They need to
[12:56] Speaker 5: go on top of the reform. From an economic perspective
[12:59] Speaker 5: for the long term, it's just not happening. They keep
[13:01] Speaker 5: disappointing investors and they obviously exiting onto the sovereign market
[13:06] Speaker 5: from Indonesia, so that shorre to Indonesia will be maintained
[13:09] Speaker 5: until they can get on top of some meaningful economic
[13:12] Speaker 5: reform in there. Having settled that it's a great country,
[13:15] Speaker 5: of course, and with that weakening currency, the tourism sector
[13:19] Speaker 5: will be the big beneficiar of it. But from an
[13:21] Speaker 5: economic point of view and an investment point of view,
[13:23] Speaker 5: from a debt or equity Indonesia not the place to be,
[13:27] Speaker 5: similar to India, it's just not the place to be
[13:30] Speaker 5: searching for those returns. They just need that more broad
[13:33] Speaker 5: based economy reform and or access to some key tech
[13:36] Speaker 5: sectors of those earnings and on the debt side, can't
[13:39] Speaker 5: find a positive story to be going overweight India, but
[13:42] Speaker 5: nevertheless Southeast Asia. There is opportunity in North Asia, but
[13:46] Speaker 5: just a reinforce. We prefer where you can nick I
[13:49] Speaker 5: Singapore costby on retlacement and Australia as an index Waiting.
[13:56] Speaker 1: Georgia, we're talking about a great time, a good country
[13:59] Speaker 1: to go to. That's been the play here in Japan
[14:01] Speaker 1: as well. We have so many tourists and a lot
[14:03] Speaker 1: to do with the weak Japanese. Yet in fact, the
[14:06] Speaker 1: finance mister Katayama speaking right now, saying that they're looking
[14:10] Speaker 1: at the oil related impact on currencies, that it's large.
[14:14] Speaker 1: She keeps reiterating that. But at the same time, of course,
[14:16] Speaker 1: we're watching for potential intervention given that we're at that
[14:20] Speaker 1: one sixty zone. Is a future of most Asian currencies
[14:24] Speaker 1: just more downside at this point, given just the fundamentals
[14:27] Speaker 1: with positive surprises coming from US economic data, safe haven place.
[14:33] Speaker 1: Even South Korea is such a strong market right now,
[14:35] Speaker 1: and you have the Korean one way past fifteen hundred.
[14:40] Speaker 5: Yeah, very sympathetic to the same of that question. Let's
[14:44] Speaker 5: put career aside because of the capital controls and QF
[14:47] Speaker 5: take status. But let's just go straight into Japan. The've
[14:49] Speaker 5: aptimatic clear that one six day that intervention. So the
[14:53] Speaker 5: framework outlocked around that is that the structural weakness for
[14:56] Speaker 5: the end to continue with pockets of intervention to prevent
[14:59] Speaker 5: that in just a one way So intervened at that
[15:03] Speaker 5: one nine sixty level, get it towards that one fifty six,
[15:06] Speaker 5: intervene again until it structurally gets weaker over time. Given
[15:10] Speaker 5: that they remember, the BOJ would still like to somehow
[15:14] Speaker 5: can continue to maintain the narrative and deliver higher nominal
[15:18] Speaker 5: rates from the cash all the way out to that
[15:19] Speaker 5: two three year so on that framework which should be
[15:23] Speaker 5: supportive of it, but there's many other moving parts. So
[15:25] Speaker 5: structural weakness for yen with more yen intervention to prevent
[15:29] Speaker 5: that being just a one way play. But this time
[15:33] Speaker 5: next year still see a weaker yen abouts of rallying,
[15:37] Speaker 5: you know, lots of periods of that going forward, and
[15:40] Speaker 5: that's a theme for all parts of capital structure or
[15:43] Speaker 5: asset classes. More pockets of volatility are the norm for
[15:47] Speaker 5: active managers, right across the place right across for geography,
[15:52] Speaker 5: by capital structure, by asset class, et cetera. More pockets
[15:55] Speaker 5: of volatility, but structurally weaker Asian currencies with rallying and
[16:00] Speaker 5: small pockets of that in the short term.
[16:03] Speaker 2: That was George beboris head of Research also a managing
[16:06] Speaker 2: director at K two Asset Management, speaking with Bloomberg TV
[16:10] Speaker 2: host Heidi Straud Watts and Cherry On bringing you their
[16:13] Speaker 2: conversation here on the Daybreak Asia podcast. Thanks for listening
[16:19] Speaker 2: to today's episode of the Bloomberg Daybreak Asia Edition podcast.
[16:24] Speaker 2: Each weekday, we look at the story shaping markets, finance,
[16:27] Speaker 2: and geopolitics in the Asia Pacific. You can find us
[16:30] Speaker 2: on Apple, Spotify, the Bloomberg Podcast YouTube channel, or anywhere
[16:34] Speaker 2: else you listen. Join us again tomorrow for insight on
[16:38] Speaker 2: the market moves from Hong Kong to Singapore and Australia.
[16:42] Speaker 2: I'm Doug Chrisner, and this is Bloomberg

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