Excessive risk-taking making stocks overvalued, says IMF | Malay Mail

A man takes out a scooter at the International Monetary Fund headquarters after closing of the IMF/World Bank annual meetings in Washington October 9, 2016. — Reuters picWASHINGTON, April 6 — Massive government aid has provided liquidity to support economies during the Covid-19 pandemic, but also caused stock prices to surge beyond their value, the IMF cautioned today.

Stock prices worldwide, especially among tech companies, have surged throughout the pandemic, picking up speed in recent weeks to set successive new records as the global economy showed signs of a strong recovery from the downturn. However, the IMF warned policymakers to “avoid a legacy of vulnerabilities” in the financial system, and to “tighten” oversight tools “to tackle pockets of elevated vulnerability.”

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