26/09/2025

BIZ & FINANCE FRIDAY | SEPT 26, 2025

17

Big investors blindsided by stunning American comeback

MEXICO CITY: tycoon Fernando Chico Pardo has agreed to pay US$2.3 billion (RM9.7 billion) to acquire a 25% stake in US banking giant Citi’s Mexican subsidiary, the group said on Wednesday. “Fernando Chico Pardo will acquire 25% (~520 million shares) of Banamex’s outstanding common shares,” Citi announced. Citi, which last year announced plans to cut 20,000 jobs, has for years been seeking to spin off its Mexican consumer banking unit. Banamex is Mexico’s fourth largest financial group, according to the company itself. Chico Pardo has made a fortune operating ports in US and Latin America, as well as luxury hotels, and airports. “This transaction represents our longstanding purpose of advancing projects that strengthen Mexico’s development,: he said in the statement issued by Citi. He said he and his family were also “profoundly committed to continuing and to renew the social and cultural programs that distinguish Banamex and give access to an invaluable artistic heritage to millions of Mexicans”. – AFP Mexican tycoon pays US$2.3b for stake in Citi unit According to US-based Consumer Reports, an estimated 650 million people worldwide were still using Windows 10 as of last month. – AFP Mexican WASHINGTON: Microsoft on Wednesday announced new options for US and European customers to safely extend the life of the Windows 10 operating system free of charge just days before a key deadline to upgrade to Windows 11. The US tech giant plans to end support for Windows 10 on Oct 14, a move that has drawn criticism from consumer advocacy groups and sparked concerns among users who fear they’ll need to purchase new computers to stay protected from cyber threats. In response to these concerns, Microsoft informed European users that essential security updates will be extended for one year at no additional cost, provided they log in with a Microsoft account. Previously, the company had offered a one-year extension of Windows 10 security updates for US$30 to users whose hardware is incompatible with Windows 11. In the US, a similar free option will allow users to upload their Windows 10 profiles to Microsoft’s backup service and receive security updates for up to one year. Alternatively, US customers can opt to pay US$30 for the extension or redeem 1,000 Microsoft Rewards points – earned through activity on the firms platforms – to access the updates. In Europe, advocacy groups have pushed for concessions. French organisation Halte à l’Obsolescence Programmée launched a petition demanding free updates through 2030. Germany’s Verbraucherzentrale consumer federation warned in May that Microsoft’s decision “worries consumers and limits their ability to make free purchasing choices”. Microsoft offers Windows 10 lifeline at no-cost

Some investors said they were returning to Wall Street with one eye on the exit given medium-term risks such as Trump’s trade levies exacerbating US inflation and weighing on growth. “The (market) momentum is certainly there, but let’s take it quarter by quarter,” Fidelity’s Salman said. He saw “shades of 2000” in the AI stock boom, warning that a repeat of that year’s dotcom stock crash could create an economic shock by reducing consumer wealth. US households’ equity ownership has hit a 75-year high and stocks owned directly or through retirement vehicles represent 68% of their total wealth, analysis of Fed data by consultancy Capital Economics showed. “That should ring alarm bells, even if the buoyant stock market keeps rising for a while,” Capital Economics said. Foresight Group managing director Mayank Markanday expected US savers who have parked a record US$7.7 trillion in US money market funds to move into domestic stocks or high-yielding US corporate debt as rates fall. “The only positive for the rest of the world is that valuations remain more attractive in relation to the US. “However its definitely not the time to cut your US exposure and swing heavily towards that rest-of-the-world trade.” – Reuters

the US was a better idea in theory than in practice. “You cannot get away from the US,” Russell Investments global head of fixed income and foreign exchange solutions strategy Van Luu said. “Especially with equities.” Measured in dollars, the de facto reporting currency for many global investors, the benchmark S&P 500 index has outpaced its European equivalent since June. US small caps have edged ahead of Europe’s since late August. Weekly flows into US equity funds tracked by EPFR hit a year-to-date high of almost US$58 billion last week as euro zone funds drew in just US$1 billion and Japan funds registered zero net inflows, Barclays’ analysis of the data showed. The US asset comeback can also be seen in bonds. French budget strife and Germany’s borrowing bonanza have lifted euro zone bond yields by about 15 bps this quarter as equivalent US yields have fallen by roughly the same amount. Bond yields move inversely to prices. Of the major US assets hit by April’s tariff turmoil, only the dollar is lagging, but it has stabilised. After the greenback posted its worst first-half of the year against the euro in the six months to June, an index measuring the greenback against rivals including the euro is up 0.8% this quarter.

o Fund inflows to US assets resume as Europe and Japan flows dwindle

LONDON: An investor stampede out of the United States and into Europe and Asia has reversed course as big money managers ride a wave of AI and interest rate-cut euphoria into the year-end, ditching the “rest-of-the world” trade for now. Global fund managers had offloaded US stocks at a record pace after President Donald Trump unveiled steep reciprocal tariffs on April 2. The market has recovered since then, however, and US stocks have surged 7% in the last quarter. Wall Street’s market supremacy is back and investors are likely to favour US assets in the coming quarter as traders price in 110 basis points of Federal Reserve rate cuts by end-2026 and AI juggernauts boost analysts’ stock market targets and US economic growth. “There’s no need for pessimism right now about the US,” said Salman Ahmed, Fidelity International’s global head of macroeconomics and strategic asset allocation. He was positive on US small-cap stocks that typically benefit from rate cuts and had turned neutral on Europe and Japan. The Fed last week cut rates for the first time since December. WASHINGTON: Sales of new US homes beat analysts’ expectations in August to reach the fastest pace since early 2022, government data showed on Wednesday, as mortgage rates pulled back and builders offered incentives to lure buyers. New home sales surged 20.5% from the prior month to a seasonally adjusted annual rate of 800,000, according to Department of Commerce data. This was comfortably above the 650,000 level expected by a Briefing.com consensus forecast. Affordability has bogged down property sales in the world’s biggest economy in recent years, with the popular 30-year fixed-rate mortgage hovering at higher levels than before. In August, the rate stood at around 6.6%, pulling back from about 6.7% in July. “Buyers are responding to lower mortgage rates and incentives from builders,” Navy Federal Credit Union chief economist Heather Long said. They “are seeing a lot of value in new homes and taking advantage of the unusually high glut of new homes for sale on the market”, she added in a note. But the median price of new houses sold was US$413,500, still up 4.7% from the July level. Long said many Americans remain on the sidelines, waiting for cost pressures to ease. Last week, the US central bank

In June, global fund managers surveyed by Bank of America were the most negative on US stocks and the dollar out of all major asset classes. But by early September, these big investors were betting again on US equities, buying back into the dollar and reducing exposure to euro zone, emerging market and UK stocks, BofA’s survey showed. Francesco Sandrini, Italy CIO at Europe’s biggest investor Amundi, said he was currently tilting his portfolios towards the US and expected smaller domestically focused companies to benefit in particular from rate cuts. He had turned less positive on European banks and Chinese stocks. Data from fund tracking service Lipper, whose figures provide a snapshot of the global mood, showed investors resumed buying US stocks in August after pulling almost US$78 billion from the asset class in the three months prior. Flows into euro zone funds that report to Lipper, which hit a 12-month high of almost US$3 billion in April, dwindled to US$563 million by August. Investors said these moves showed how diversifying away from

US new home sales soar to fastest pace since 2022

A man looking at advertisements for luxury apartments and homes in the window of a Douglas Elliman Real Estate sales business in Manhattan’s upper east side neighbourhood in New York. – REUTERSPIC

made its first interest rate cut of 2025, reducing the benchmark lending rate by 25 basis points and signaling further reductions this year. “Homebuilders have been

offering price cuts and other incentives to encourage sales,” said Nancy Vanden Houten, lead economist at Oxford Economics. But, she warned, “there are signs some builders are going to cut back

on those incentives as profit margins have been squeezed.” Analysts have cautioned that new home sales are volatile, accounting for a small size of the overall market. – AFP