06/05/2025

BIZ & FINANCE TUESDAY | MAY 6, 2025

18

Investors worry Berkshire may lose Buffett premium

Trump will not remove Powell before term ends WASHINGTON: US President Donald Trump said he will not remove Jerome Powell as Federal Reserve Board chairman before his term ends in May 2026 while describing the central banker as “a total stiff” and repeating calls for the Fed to lower interest rates. In an interview with Meet the Press with Kristen Welker ”on NBC News airing on Sunday, Trump said Powell was no fan of his, but he expected the Fed to lower interest rates at some point. “Well, he should lower them. And at some point, he will. He’d rather not because he’s not a fan of mine. You know, he just doesn’t like me because I think he’s a total stiff,” he said in the interview, which was taped in Florida. Asked if he would remove Powell before his term as chair ends in 2026, Trump issued his most definitive denial, saying: “No, no, no. That was a total – why would I do that? I get to replace the person in another short period of time.” Wall Street stocks fell sharply last month after Trump doubled down on his attacks against Powell, amplifying concerns about the Fed’s autonomy. After the nosedive, Trump has backed off somewhat. The comments were the clearest indication yet that the US president would keep Powell in place, which could reassure markets deeply unsettled by Trump’s moves to upend the global trading system with a tsunami of tariffs. Trump’s administration is negotiating with over 15 countries for trade deals that could avert the higher tariffs, and officials say the first deal could be announced soon. During the interview, Trump declined to rule out making some of the tariffs permanent. “No, I wouldn’t do that because if somebody thought they were going to come off the table, why would they build in the United States?” Trump acknowledged he had been “very tough with China,“ essentially cutting off trade between the world’s two large economies, but said Beijing now wanted to reach an agreement. “We’ve gone cold turkey,“ he said. “That means we’re not losing a trillion dollars ... because we’re not doing business with them right now. And they want to make a deal. They want to make a deal very badly. We’ll see how that all turns out, but it’s got to be a fair deal.” – Reuters Japan says no plan to threaten Treasuries sale TOKYO: Japan has no plans to threaten to sell its US$1 trillion-plus holdings of US Treasuries in trade talks with Washington, Finance Minister Katsunobu Kato said on Sunday, clarifying earlier remarks that the bond holdings could be used as a bargaining chip. “My comments were made in response to a question whether Japan could, as a bargaining tool in trade negotiations, explicitly reassure Washington it wouldn’t sell its Treasury holdings easily,” Kato said. “The comments weren’t meant to suggest selling Treasury holdings,” the minister told a press conference in Milan. In a television interview on Friday, Kato said Japan’s US Treasury holdings could be used as a card in trade negotiations, raising explicitly for the first time its leverage as a massive creditor to the United States. Kato in the interview added whether Japan actually uses that card is a different question. At the press conference on Sunday, Kato repeated that the primary purpose of Japan’s US Treasury holdings – the largest in the world – is to ensure it has sufficient liquidity to conduct yen intervention when necessary. “This has been our stance, and we don’t plan to use sale of US Treasury holdings as a bargaining tool in the negotiations,” he said. – Reuters

OMAHA: Berkshire Hathaway shareholders mourning the departure of legendary investor Warren Buffett anticipate the conglomerate he built over 60 years will retain its long-term focus and culture but worry about the loss of Buffett’s vision and star power. Following Buffett’s surprise announcement on Saturday that he would step down as chief executive by the end of the year, Berkshire shareholders and fans said the Omaha, Nebraska-based company will remain in good hands once vice-chairman Greg Abel takes the top job. But they said it remains unclear how the US$1.16 trillion (RM4.8 trillion) conglomerate, which has 189 operating businesses, US$264 billion of stocks and US$348 billion of cash, will fare after the man so intertwined with it leaves the stage. Buffett made the announcement at the end of the Berkshire annual meeting after hours of taking shareholder questions. He said Berkshire’s board of directors will meet later to discuss the transition. “There has been a premium on Berkshire because of Buffett,” said Mark Malek, chief investment officer at Siebert.NXT. “Will people look at it in the same way?” Richard Casterline, a computer programmer from Denver, said it was a “bit shocking” to learn of Buffett’s departure. “I don’t think (Abel) elicits the same excitement. “It’s not any fault of his own, it’s just thinking of who could be as legendary as those two are. It’s just tough shoes to fill.” Still, many see Abel as right for the job. “This is Buffett’s baby, and he thoughtfully and deliberately planned for an orderly succession that does not disrupt the value of his life’s work,” said Daniel Hanson, senior portfolio manager at Neuberger Berman. “I have full confidence in Greg’s leadership.” Richard Lancaster, an accounting consultant from Charlotte, North Carolina, likened the change to Steve Jobs handing Apple’s reins to current chief executive Tim Cook in 2011. “You have two different personalities, two different approaches,” said Lancaster. “Greg has all the qualities Warren likes in a manager: very sharp individual, and well-versed in what’s in the business climate o But they anticipate conglomerate will retain long-term focus and culture

Buffett attending the Berkshire Hathaway annual shareholders’ meeting in Omaha. – REUTERSPIC

as Dairy Queen, Fruit of the Loom and See’s Candies. Another possible change: how readily Berkshire will unload businesses it owns, including when they underperform. Buffett is known as a collector of businesses but has made exceptions, as when businesses lose competitive advantages. In 2019, Berkshire sold its Applied Underwriters workers compensation unit, and the next year shed its newspaper empire as falling ad revenue led Buffett to brand the industry “toast”. Leaders of most Berkshire businesses have since 2018 reported to Abel, while Berkshire’s insurance businesses such as Geico, General Re and National Indemnity have reported to vice-chairman Ajit Jain, which they will continue doing. Managers praise Abel as a quick study, despite overseeing businesses as varied as aircraft parts maker Precision Castparts, toolmaker Iscar and Borsheims jewellery. Quick changes are unlikely. Berkshire’s sheer size makes undoing Buffett’s work in short order, or making a transformational acquisition, very difficult. “Buffett has built such an amazing machine,” said Nate Garrison, chief investment officer at World Investment Advisers. “It’s something that will stand the test of time.” – Reuters

today and the changes that will come through disruptive technologies.” Under Buffett, Berkshire’s annualised shareholder return has roughly doubled that of the Standard & Poor’s 500. Buffett’s aura was such that when Berkshire disclosed new common stock investments, it routinely sent the stock prices higher even if Buffett himself wasn’t doing the investing. Some analysts believe Abel may be more hands-on than Buffett in overseeing Berkshire’s subsidiaries. “Abel’s going to have to tread a fine line between maintaining a Buffett-like environment, with also making his mark,” said analyst Cathy Seifert at CFRA Research. And some investors clamor for Berkshire to pay a dividend, which it has not done since 1967. Abel has hinted at changes. Prior to Buffett’s announcement, which Abel had not known was coming, the vice chairman told annual meeting attendees he would be “more active, but hopefully in a very positive way”, in overseeing Berkshire subsidiaries, though they would continue running “very autonomously”. Berkshire’s businesses are diverse, including Geico car insurance, the BNSF railroad, many utility and power companies, a real estate brokerage, and retail brands such

Vietnam still aiming for 8% growth despite ‘more challenges’ HANOI: Vietnam faces more challenges than opportunities because of US tariffs but will still aim to meet its target of at least 8% growth this year, the Prime Minister said yesterday, ahead of the start of trade talks with Washington later this week. he said, adding the first negotiation session will take place tomorrow. for the country to restructure its economy. He said Vietnam will seek to boost its exports to 17 markets that it has signed free trade agreements with.

“The government has been closely working with the negotiation team, and related agencies to urgently complete a plan to be ready for negotiations with the United States,” he said. Pham said the US tariffs are threatening global supply chains and the global economy. Vietnam, a major regional manufacturing base for many Western companies, last year had a trade surplus with the US of more than US$123 billion. “We are facing more challenges than opportunities this year,” the premier said, adding the trade war also offered opportunities

Vietnam will also seek to boost consumption and ramp up public investment to upgrade its infrastructure this year, including starting work on a multi-billion dollar railway line linking its Haiphong port with China. In recent years, Vietnam has faced power shortages that hit factories and families in northern provinces during heatwaves. “We won’t let power shortages happen this year, in any circumstances,”Pham said. – Reuters

The economy, which is heavily reliant on exports for growth, is facing a 46% tariff if a reduction cannot be negotiated before a US moratorium expires in July. “We have stayed calm and courageous and taken several appropriate measures,” Pham Minh Chinh told Parliament. “Vietnam is among the first countries the US has agreed to hold tariff negotiations with,”