World Street | Berkshire trims BoFA stake, OPEC pauses output hike, JPMorgan downgrades Chinese stocks and more

World Street offers a sneak peek into the world of business and economy.

Warren Buffet' Berkshire Hathaway  pares stake in Bank of America. OPEC delays plans to output hike. JPMorgan has pulled back its buy call on Chinese stocks. Merger to two state-backed Chinese brokerages. Another roadblock in Nippon Steel's takeover of US Steel. All this and much more in today's edition of World Street.

Cashing out 

Warren Buffett's Berkshire Hathaway has sold $760 million worth of Bank of America shares—one of its largest holdings—over the past three sessions, according to regulatory filings on Friday. The sale of 18.7 million shares has further bolstered Berkshire’s cash reserves, now standing at $277 billion, with a total of $6.97 billion raised from trimming its stake in the bank since July. Despite these sales, Berkshire remains Bank of America's largest shareholder, holding  an 11 percent stake valued at $34.7 billion.

Change of plans

OPEC+ has decided to delay its planned oil output increase for two months after prices tumbled due to weak demand and abundant supply. Key coalition members opted not to proceed with the scheduled hike of 180,000 barrels per day in October, according to a Bloomberg report. As news of the pause broke, oil prices rose by over 1 percent.

The shift follows disappointing economic data from China and the US, the world’s largest oil consumers, which had pushed crude prices below $73 a barrel earlier in the week, hitting their lowest point since late 2023. While the dip in prices offers some relief to consumers grappling with inflation, it remains too low for countries like Saudi Arabia and other OPEC members to meet their fiscal needs.

Relentless delays

According to Reuters on Wednesday, the White House is reportedly close to announcing that President Joe Biden will block the Japanese company's $15 billion bid for US Steel, citing national security concerns. The deal is facing growing bipartisan opposition ahead of the US presidential elections, with a powerful labor union also opposing the takeover of Pennsylvania-based US Steel, a key player in a swing state crucial for both Democrats and Republicans. While both companies aim to finalize the deal by year-end, its sensitivity is heightened by the close US-Japan alliance and Japan's position as the largest foreign investor in the US.

Fear unlocked

JPMorgan has snapped its buy recommendation on Chinese stocks, citing concerns over potential risks of a second tariff war after the US elections in November and growing unease about the country's economic outlook. The brokerage downgraded China's rating to "neutral" from "overweight" and suggested investors shift focus to markets like India, Mexico, and Saudi Arabia.

China's economic growth is faltering—by its own high standards—and the country is struggling to draw in global investors, who are increasingly favoring other emerging markets like India.

Coming Together

The merger of two state-backed Chinese brokerages to form a sector leader with $230 billion in assets marks a significant step in Beijing's effort to consolidate the $1.7 trillion brokerage industry amid tough market conditions, according to analysts. Shanghai-based Guotai Junan Securities is set to acquire its rival, Haitong Securities, through a share swap, as announced by both firms on Thursday. The deal is pending regulatory and shareholder approvals. Once finalised, the merged entity—boasting total assets of 1.6 trillion yuan ($225.6 billion)—will surpass Citi Securities to become China's largest brokerage.