2023-06-19 09:33:00
Warren Buffett, Jun 19, 12:33 pm
Buffett ups stakes in five sogo shosha from Japan to 8.5%
Warren Buffett’s Berkshire Hathaway continues to invest in Japan’s five largest trading houses. Celebrity investor bet on Japanese companies in 2020
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Фото: Spencer Platt / Getty Images
Warren Buffett’s investment firm Berkshire Hathaway has increased its stake in Japan’s top five sogo shosha trading houses to an average of over 8.5%. informed Bloomberg. Berkshire plans to increase its investment to 9.9% in each of the five Japanese companies. “After this, Berkshire Hathaway does not plan to make any purchases unless special investment approval is obtained from the board of directors,” the holding said in a statement.
The famous investor placed a bet on five Japanese trading houses in the summer of 2020. Then Berkshire Hathaway bought just over 5% of the shares in five large Japanese companies – Itochu, Marubeni, Mitsubishi, Mitsui & Co and Sumitomo, each of which belongs to the sogo shosha. The total amount of investments was estimated at $6.22 billion. In November 2022, the conglomerate increased investments in these companies, its share in each of them reached at least 6%.
In April, Warren Buffett’s investment firm said it had again increased its stake in Japan’s five largest trading companies to 7.4% and was considering further investments in other companies in the country. At that time, Berkshire reported that the company could increase its stake in each of the trading houses to 9.9% if approved by the company’s boards of directors. Buffett has previously said that Berkshire Hathaway plans to hold on to investments in Japanese trading houses for 10 to 20 years.
Shogo Shosha (from the Japanese 総合商社, which translates as “comprehensive trading firms”) are Japanese one-stop trading companies whose activities cover almost all sectors of the economy. They are engaged in trade, supply of raw materials, development and production of various products, including food. Trading companies also invest in oil and gas projects around the world. They also import metals, textiles, food and other goods.
After the news about Buffett’s interest in Japanese trading houses, their shares showed a significant increase. Every stock Buffett has invested in is up more than 30% this year, with Marubeni up 62%. Japanese trading company Marubeni has more than tripled in value since the end of 2020.
The backing of the billionaire investor, coupled with signs of stable inflation in the country and measures to boost shareholder returns, including share buybacks, helped lift Japanese stocks to a 33-year high. The Nikkei index has shown growth for the last ten weeks in a row. Since the beginning of the year, it has grown by 28%.
Favorable factors for Japanese stocks continue to strengthen, – told market strategist at brokerage Saxo Markets, Charu Chanana. “While it was previously announced that Berkshire would increase its investment in the company, <…> the share increase announcement was made a little earlier than expected, and this will further increase optimism for Japanese stocks,” the expert said.
According to T&D Asset Management’s chief strategist, Hiroshi Namioka, further upside potential for Japanese equities may be limited as the market has already priced in Buffett’s further buying. The expert believes that the news is unlikely to have a significant positive impact on Japanese stocks in general.
Buffett invested in Japanese sogo shosha. What is it and why did he choose them
Author: Marina Mazina.
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