Indian IT firm Persistent Systems drops after report that key client UnitedHealth faces criminal probe
May 15 (Reuters) - Shares of Persistent Systems (PERS.NS), opens new tab declined 3% on Thursday, the most among Indian IT services providers, after a media report said that key client UnitedHealth Group (UNH.N), opens new tab was under a criminal probe for possible Medicare fraud.
The U.S. Department of Justice's healthcare-fraud unit is overseeing the criminal investigation, which focuses on UnitedHealth's Medicare Advantage business practices, the Wall Street Journal had reported. The company said it stood by the integrity of the program.
UnitedHealth is one of Persistent Systems' top five clients and has an "over $100 million relationship" with the company, said Rahul Jain, an IT analyst at Dolat Capital.
It was not clear how much of Persistent Systems' revenue is linked to UnitedHealth. The company did not respond to a Reuters email seeking comment.
The stock was set for its worst day in one month and the biggest drag on the IT index (.NIFTYIT), opens new tab, which was up 0.4%.
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US judge rules health insurers, MultiPlan must face price-fixing lawsuits
June 3 (Reuters) - A U.S. judge on Tuesday said healthcare providers can pursue claims that technology provider MultiPlan and a group of insurers conspired to underpay them billions of dollars in reimbursements for out-of-network health services. U.S. District Judge Matthew Kennelly in Chicago ruled, opens new tab that doctors and other providers who filed the proposed class action had plausibly alleged a price-fixing conspiracy that relied on insurers collectively sharing sensitive information with MultiPlan to set reimbursement rates. MultiPlan, which rebranded as Claritev in February, processes payments for out-of-network healthcare services. Major insurers, including defendants UnitedHealth, Aetna and Cigna, have contracts with the company and use its software. In a statement on Tuesday, MultiPlan said it was 'confident in the strength of our legal position' and that the lawsuits have no merit. Aetna parent CVS in a statement said, 'we stand ready to argue the substantive facts of the case and defend ourselves vigorously in this matter.' UnitedHealth and Cigna did not immediately respond to requests for comment. All of the defendants have denied any wrongdoing. Kennelly is presiding over consolidated, opens new tab lawsuits that were first filed in 2023. MultiPlan processes more than 80% of out-of-network claims across the country, or abut 370,000 daily claims, according to the plaintiffs. In a statement, attorneys for the health providers said MultiPlan and the insurance defendants 'orchestrated a cartel through the sharing of competitively sensitive confidential pricing information to illicitly coordinate on out-of-network reimbursements.' MultiPlan and the insurers have argued that health providers are free to reject an insurance company's payment and instead seek full compensation from patients. MultiPlan told the court its services provide industry more flexibility, lowering costs to insurers and patients. Kennelly in his ruling said "whether or not MultiPlan's calculated rates are labeled as 'recommendations,' the plaintiffs plausibly allege that they are more akin to mandates." The U.S. Justice Department submitted a court filing in March backing claims in the health providers' case. The case is In re MultiPlan Health Insurance Provider Litigation, U.S. District Court for the Northern District of Illinois, No. 1:24-cv-06795. Read more: US Justice Department backs medical providers' lawsuit over data analytics software Hospital sues data analytics company MultiPlan in US court antitrust case
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Trading Day: Market inflection points abound
ORLANDO, Florida, June 3 (Reuters) - By Jamie McGeever, Markets Columnist Stocks and the dollar rose solidly on Tuesday even though markets lacked a central, driving force - signs of weakening economic activity, cooling labor markets and disinflation are all reasons for caution, but risk appetite continues to be fueled by hopes that U.S.-China trade tensions will soon ease. In my column today I look at why foreign investors' exposure to U.S. assets may not be as high as feared. If it's not, the potential downside for Wall Street and Treasuries from diversification may be less severe. More on that below, but first, a roundup of the main market moves. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. Today's Key Market Moves Market inflection points abound Evidence is mounting that global economic activity is slowing, but this is failing to move the dial much for markets. Investors know growth is slowing and that the second half of the year will be challenging, so that's already 'in the price'. Hopes of a de-escalation in the trade standoff between the U.S. and China, and for bilateral deals between the U.S. and other key trading partners soon are supporting risk assets. The S&P 500 hit a three-month high on Tuesday, while the Nasdaq and MSCI World index climbed to levels last visited in February. It is the strength on Wall Street, most latterly tech, that is lifting global stocks as benchmark Asian and European indices are flatlining. On the whole, policymakers continue to stress that they are data-dependent and will move on rates carefully and calmly. That was the message from various Fed officials this week and Bank of England Governor Andrew Bailey on Tuesday. It's a slightly different - although no less challenging - situation in mainland Europe, where figures on Tuesday showed disinflationary forces are driving consumer prices as much as anything else. Euro zone inflation dipped below the European Central Bank's 2% target in May, cementing expectations rates will be cut this week and later this year. Meanwhile, Switzerland experienced outright year-on-year deflation for the first time in four years, raising the possibility that the Swiss National Bank may soon reintroduce negative interest rates. Canada's central bank is expected to hold interest rates at 2.75% on Wednesday for a second meeting. Growth and inflation have been surprisingly sticky this year, and rates have been slashed by 225 basis points since last June. As UBS analysts note, markets are generally at an inflection point, waiting for the catalyst that will break them out of the narrow ranges that have broadly held since the U.S. and China announced a temporary reduction on tariffs on May 12. Even Wall Street and the dollar - one creeping higher, the other drifting lower - are awaiting a trigger for a proper breakout. Could the telephone call between U.S. President Donald Trump and Chinese leader Xi Jinping expected later this week be it? Foreign exposure to U.S. assets may be lower than feared It is widely believed that investors around the world have a disproportionately high exposure to U.S. assets, particularly stocks, an imbalance that could roil U.S. markets if corrected. But what if these fears are overblown? Several eye-popping statistics suggest that America's weight in world financial markets is even greater than its outsized economic might. Most strikingly, the U.S. net international investment position (NIIP), or foreign investors' holdings of U.S. assets less U.S. investors' holdings of overseas assets, at the end of 2024 was $26 trillion. That's nearly 24% of global GDP, up from 16% only two years earlier, a surge driven by foreigners' insatiable appetite for U.S. equities, mainly "Big Tech". Demand was so hot that, by some measures, the value of U.S.-listed stocks at the turn of the year represented 74% of total global market cap. That share was 60% six years ago, and less than half in 2011. But the attractiveness of dollar-denominated assets is now being questioned, as the often erratic policies of U.S. President Donald Trump have upset longstanding economic and geopolitical norms, making governments and investors question whether Washington is still a reliable partner on the global stage. The concern is that this eroding confidence triggers a reversal of the massive flows into Wall Street seen in recent years that has damaging spillover effects. Such a correction may not require outright selling. Given the scale of the flows involved, just less buying among foreign investors could be enough to cast a shadow over the world's most important stock market. And the running assumption is foreign investors don't have the capacity or willingness to increase their exposure to U.S. assets, creating a significant long-term downside risk for Wall Street, Treasuries and the dollar. "A structural shift is underway: the slow erosion of US economic dominance," analysts at Deutsche Bank wrote on Monday. But looked at another way, foreign exposure to U.S. assets may not be as high as initially meets the eye. That's the view of analysts at JP Morgan, who measure portfolio investment in U.S. bonds and equities as a share of countries' total household sector financial assets. They use a broad definition for a country's "household" sector, covering investments by institutions like insurance companies and pension funds that are ultimately made on behalf of households. Using a broad range of data, from central banks, U.S. Treasury and OECD household financial asset flows, they measure the ratio of U.S. equity and bond holdings relative to household financial assets in each country. They find that "relative to the total financial assets of households in the rest of the world, the allocations to U.S. assets typically stand at around 10-20%." As a result, they are "skeptical of the idea that foreign investors hold too much of U.S. assets." Given that U.S. equities account for more than 70% of the MSCI global market cap and dollar-denominated bonds represent around 50% of global bond indices, according to JP Morgan estimates, the 10-20% exposure of foreign investors to U.S. assets does appear surprisingly low. 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