AI-Led Stock Rally Changing Global Market Valuations: Sebi Chief

The global rally in artificial intelligence (AI) stocks is changing stock market rankings across countries, said Securities and Exchange Board of India (Sebi) Chairperson Tuhin Kanta Pandey.

He explained that the valuations of semiconductor and AI-related companies have risen sharply around the world, according to a report by Moneycontrol.

He said that many of the companies currently attracting investors are directly or indirectly linked to AI.

“Either they are making investments around AI or they are making investments around chips, memory products, and other kinds of electronics used for AI infrastructure,” he said.

Companies investing in AI, chips, memory products, and other electronic components needed for AI infrastructure are seeing strong investor interest, he said.

Pandey said that market valuations in some countries rise sharply when investors show exceptional interest in certain sectors or companies.

When asked about Taiwan’s stock market becoming larger than India’s in terms of market capitalisation, Pandey said India has a very diversified market, while Taiwan’s market is more concentrated.

He explained that Taiwan has only a few major companies driving the market.

Pandey specifically mentioned Taiwan Semiconductor Manufacturing Company (TSMC), saying it plays a very important role in the global electronics supply chain and is receiving large investment inflows, which have increased its valuation.

He added that such changes are a normal part of capital markets.

Taiwan’s stock market valuation has overtaken Indian equities valuation as the latter came under pressure due to foreign investors shifting to markets like Taiwan and South Korea to benefit from the AI wave.

Pandey also said Sebi was working on a pilot project to tokenise corporate bonds using distributed ledger technology (DLT). He said the regulator expects the project to take around six to nine months to become operational.

On cybersecurity and AI-related rules for market intermediaries, Pandey said Sebi has already issued advisories and circulars after recent incidents in the market ecosystem.