18/08/2025

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Malaysian Paper

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Foreign holdings of US Treasuries climb to US$9.13t

NEW YORK: Foreign holdings of US Treasuries rose to record levels in June, topping US$9 trillion for a fourth straight month, data from the Treasury Department showed last week. Holdings of US Treasuries climbed to US$9.13 trillion (RM38.5 trillion) in June, up from US$9.05 trillion in May. Compared with a year earlier, Treasuries owned by foreigners were up nearly US$1 trillion, or 10% higher. However, on a transaction basis, the US experienced outflows of US$5 billion after buying roughly $147 billion in Treasuries in May, the largest since August 2022. In April, there was an outflow of US$40.8 billion as President Donald Trump’s back-and forth tariff policies roiled markets. Japan remained the largest non-US holder of Treasuries, with a record US$1.147 trillion in June, up US$12.6 billion from the previous month’s US$1.134 trillion. UK investors, the second-largest owner of US government debt, raised their pool of Treasuries to another record of US$858.1 billion, up 0.6% from US$809.4 billion in May. The UK overtook China as the second-largest non-US holder of Treasuries in March. The UK is widely viewed as a custody

o Japan remains largest non-American holder of debt instruments

country, generally a proxy for hedge fund investments. Other countries used by hedge funds for custody services include the Cayman Islands and the Bahamas. Treasury holdings of China, the third-largest owner of U.S. government debt, were little changed at US$756.4 billion, compared with US$756.3 billion in May, which was the lowest since February 2009 when the country’s stock of Treasuries dropped to US$744.2 billion.

China’s holdings were way below their largest level of more than US$1.3 trillion held between 2012 and 2016. China, the world’s second-largest economy, has been gradually dumping Treasuries to bolster its currency, the yuan. Analysts said a slowing Chinese economy, post-Covid challenges, and trade barriers have diminished China’s inflows from exports. Data also showed that other foreign investors in Asia like Hong Kong and India

reduced their cache of Treasuries to US$242.6 billion and US$227.4 billion, respectively. Foreign investors, meanwhile, also poured back into US equities, injecting inflows of US$163.1 billion in June that followed US$115.8 billion in purchases in May. Data also showed that the net capital inflow into the United States totalled just US$77.8 billion, down 75% from the revised US$318.1 billion in May, which was the largest since September 2024. – Reuters

UnitedHealth surges after Buffett bets on recovery

NEW YORK: Shares of UnitedHealth Group surged nearly 14% last Friday after billionaire Warren Buffett’s Berkshire Hathaway bought 5 million shares of the company, providing a shot in the arm for investors who think the health conglomerate will turn around under its new CEO. The shares have lost nearly half their value in the last year as the company struggled to adapt to rising healthcare costs and changes to government reimbursement plans that affected its health insurance and Optum patient care businesses. News of Buffett’s stake, along with purchases by other large hedge fund managers, suggests investors believe the stock currently does not reflect its long-term outlook. However, the turnaround may be slow, as UnitedHealth reckons with billions of additional medical costs expected to hit in the coming quarters. At least two analysts said the next 18 months will remain challenging for the industry bellwether as it navigates higher utilisation of medical care and a decline in memberships in government-backed plans. The “vote of confidence” from Buffett validates UnitedHealth’s long-term value, but “(the) management needs to regain trust and credibility with investors, and get back to its beat-and-raise reputation of the past,” said James Harlow, senior vice-president at Novare Capital Management. UnitedHealth missed Wall Street’s earnings target for two straight quarters this year and was forced to pull back its 2025 outlook in May, rare

moves for a company that had long been favoured for its regular earnings growth. It reinstated the annual outlook last month, but the profit forecast was well short of analysts’ already lowered estimate. The company’s shares currently trade at about 16.75 times forward earnings estimates, compared with peer CVS Health’s 10.51. The shares have dropped nearly 40% in 2025, making it the worst-performing stock on the blue-chip Dow Jones Industrial Average this year. The stock was last up 13.9% at US$309.14, set for the best single-day move since October 2008 if gains hold. Friday’s gains helped the Dow hit an all-time intraday high, while shares of rivals Humana, Elevance Health and CVS Health rose more modestly. “I’m a bit surprised at the magnitude of the stock move today but that shows how beaten up and out of favour the stock and entire health insurance sector is,” Jeff Jonas, portfolio manager at Gabelli Funds said. In the last two years, the company has dealt with fallout from a cyberattack at its technology unit that served as a major backbone in the American healthcare system, the murder of its insurance unit chief in December, and a federal investigation into its government-backed health plans. In May, CEO Andrew Witty abruptly resigned in the face of the worsening operational issues, and Stephen Hemsley, who had run the company from 2006 to 2017, took over. – Reuters

The Meta logo marks the entrance of Facebook corporate headquarters in Menlo Park, California. – AFPPIC

Meta plans fourth restructuring of AI efforts in six months SAN FRANCISCO: Meta is planning its fourth overhaul of artificial intelligence efforts in six months, The Information reported, citing three people familiar with the matter. As Silicon Valley’s AI contest intensifies, CEO Mark Zuckerberg is going all-in to fast-track work on artificial general intelligence – machines that can outthink humans – and help create new cash flows. Meta recently reorganised the company’s AI efforts under Louisiana, Reuters reported earlier this month. In July, Zuckerberg said Meta would spend hundreds of billions of dollars to build several massive AI data centers. The company raised the bottom end of its annual capital expenditures forecast by US$2 billion, to a range of US$66 billion to US$72 billion last month.

The company is expected to divide its new AI unit, Superintelligence Labs, into four groups: a new “TBD Lab”, short for to be determined; a products team including the Meta AI assistant; an infrastructure team; and the Fundamental AI Research (FAIR) lab focused on long-term research, the report said, citing two people. Meta did not immediately respond to a request for comment. Reuters could not independently verify the report.

Superintelligence Labs, a high-stakes push that followed senior staff departures and a poor reception for Meta’s latest open-source Llama 4 model. The social media giant has tapped US bond giant PIMCO and alternative asset manager Blue Owl Capital to spearhead a US$29 billion financing for its data centre expansion in rural

Rising costs to build out data centre infrastructure and employee compensation costs – as Meta has been poaching researchers with mega salaries – would push the 2026 expense growth rate above the pace in 2025, the company has said. – Reuters